AIMSAMPReit – BT

AIMS AMP’s Japan warehouse sale completion delayed

No apparent structural damage, says Reit; buyer arranging checks

THE completion of AIMS AMP Capital Industrial Reit’s 1.49 billion yen sale of a warehouse in Tokyo’s Saitama city has been delayed following the massive earthquake that hit Japan.

The manager of the Singapore-listed real estate investment trust, which was due to complete the sale of the Asahi Ohmiya Warehouse yesterday, said in a statement that ‘there appears to be no structural damage’ to the property. But an investigation of the warehouse and logistics property ‘is currently being arranged’ by the purchaser, Tokyo-listed Industrial & Infrastructure Fund Investment Corporation (IIF), in conjunction with the trust’s asset manager in Japan.

IIF, in a news release, said that it has pushed back the acquisition of three properties, including the Asahi Ohmiya Warehouse, and ‘will acquire these properties after IIF gets the report from external research agency that there exists no problem’.

AIMS AMP’s manager said that it has received legal advice that the purchaser has no right to rescind the purchase. But any repairs, if required, must be carried out before the sale is completed.

If there is no damage to the building, the sale can be completed ‘as early as this week’, said Nicholas Paul McGrath, chief executive of AIMS AMP Capital Industrial Reit Management Ltd, the trust’s manager.

‘Completion of the sale of the property will be rescheduled to the first practicable date following completion of the investigation and any required repairs’, the Reit manager said.

The trust, formerly known as Macarthurcook Industrial Reit, said in late February that it was selling the Asahi Ohmiya Warehouse ‘to free up capital to provide the trust with greater financial flexibility for future investment opportunities’.

Net proceeds would be used to repay its debt under a revolving credit facility, reducing aggregate leverage to 32 per cent from 33.6 per cent, it said. The 1.49 billion yen sale price is slightly above the property’s book value (as at end December 2010) of 1.46 billion yen.

The units of AIMS AMP eased half a cent each yesterday to close trading at 20 cents.