ESR-REIT divests eight assets, cuts leverage to 39.2%

The divested portfolio accounted for 6.9% of net property income.

ESR-REIT Management Limited has agreed to divest a portfolio of eight Singapore industrial properties for $338.1m, a transaction expected to reduce aggregate leverage to 39.2% from 42.8% on a pro forma basis, according to a filing.

The divested properties generated $11.4m of net property income, representing 6.9% of ESR-REIT’s NPI for the six months ended 30 June 2025. Pro forma distribution per unit for FY2024 would decline 4.1% to 20.323 Singapore cents following the sale, the manager said.

The divestment price represents a 2.0% premium to the assets’ independent valuation of $331.6m as at 30 November 2025 and exceeds their book value of $327.1m by $11.0m. Net proceeds are estimated at $329.3m after transaction costs, generating an estimated net gain of $2.2m, according to the filing.

On a pro forma basis assuming full debt repayment, interest coverage would improve to 2.6 times from 2.5 times, the manager said. The proceeds may be used for debt repayment, capital expenditure or future investments.

Completion of seven properties is expected in Q2 2026, with the remaining asset scheduled to complete separately in Q3 2026, subject to regulatory approvals.

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