Redevelopment and Asset Enhancement Initiatives Track Record
Optus Centre, Australia
AA REIT undertook a customised asset enhancement initiative at Optus Centre following active discussion and collaboration with its existing master tenant to significantly enhance facilities at this property in order to meet evolving and long term demands for its tenant. Main upgrades include end-of-trip facilities, new access roads, drop-off areas and utility infrastructure. The property remained operational when the AEI works were executed.
Having significantly lifted the quality and value of this property, the master tenant extended its lease for a further twelve-year term, with in-built rental escalations terms and further options to extend lease after the initial lease term, providing long-term income stability for AA REIT.
23 Tai Seng Drive, Singapore
The successful execution of a S$1.6 million asset enhancement project at 23 Tai Seng Drive has allowed AA REIT to secure a master tenant, Racks Central, a data centre operator, on an average lease term of 7 years and increased the net lettable area of the property by 12.3%. This asset enhancement initiative contributed to incremental revenue for AA REIT and lifted valuation by S$32 million, allowing AA REIT to unlock greater value organically through its active enhancement and redevelopment strategy.
29 Woodlands Industrial Park E1, Singapore
In active collaboration with a leading global life science company as the anchor tenant of the property, AA REIT undertook an asset enhancement project of $13.0 million at 29 Woodlands Industrial Park E1, NorthTech, providing upgrades to the drop-off porches, passenger lift lobbies and lift interiors, toilets, signage, external landscaping, and the air-conditioning system. There were also upgrades to the bicycle parking area which saw the number of lots increase, in support of Singapore’s car-lite vision.
This asset enhancement initiative further enhanced the property as a modern and energy efficient hi-tech industrial facility, with the anchor tenant signing a renewal lease for 10 years subsequently. Property value increased from S$102.0 million prior to AEI to S$116.5 million upon completion of AEI works. The property is also BCA Green Mark Certified.
26 Tuas Avenue 7, Singapore
26 Tuas Avenue 7 is a two-storey purpose-built factory with mezzanine office space, fully leased to a local food manufacturer. In supporting the tenant’s growing business needs, AA REIT undertook a customised asset enhancement project of $1.19 million, providing an additional 2,077 sq ft of production line and extra storage space. Upon completion, the tenant signed on an extension to the current 10-year lease term for another 5 years.
1 Kallang Way 2A, Singapore
In optimising the space utilisation of 1 Kallang Way 2A, AA REIT undertook an asset enhancement project of $2.2 million at the 8-storey light industrial building, adding warehouse and ancillary space. This is in line with AA REIT’s strategy to unlock value within the portfolio through proactive asset management strategy and commitment for continuous portfolio growth.
The AEI works included converted the existing common areas to lettable area, deck over void area between levels four and five creating two separate floors and improved traffic circulation at driveway which added 13.0% to net lettable area. This subsequently led to an increase in annual rental income of the property, with building efficiency improving from 76.0% to 83.1%.
15 Tai Seng Drive, Singapore
AA REIT undertook a successful asset enhancement initiative at 15 Tai Seng Drive as part of an ongoing portfolio rejuvenation and active asset management strategy to drive sustainable and organic growth. Targeted building upgrades repositioned the asset from a traditional industrial building into a hi-tech property with significant power capacity to attract high value tenants and capture strong positive rental reversions. This has allowed AA REIT to secure a 10-year anchor lease with a global precision engineering and technology group who occupy one-third of the building area.
7 Clementi Loop, Singapore
AA REIT completed a targeted asset enhancement initiative at 7 Clementi Loop as part of AA REIT’s active asset management strategy to maintain high occupancy and drive positive rental reversions. 7 Clementi Loop is AA REIT’s seventh asset enhancement initiative since 2014, highlighting AA REIT’s efforts to support organic growth by rejuvenating its portfolio. The two-storey warehouse was upgraded to achieve BCA GreenMark Gold Plus certification as part of the master tenant’s long term occupational requirements, enabling AA REIT to unlock greater value and sign a 15-year master lease with a global storage and information management firm.