The strategic divestment of the Framework Building was officially completed for $56.65 million, with AIMS APAC REIT (AA REIT) successfully acquiring the industrial asset. Located at 2 Aljunied Avenue 1 in Singapore, the transaction represents a significant move for both the seller, Framework Group (a building materials distributor), and the acquiring REIT. The sale was structured as a sale and leaseback agreement, a sophisticated arrangement that provides immediate capital liquidity for the seller while granting the purchaser a steady, high-quality income stream anchored by a long-term tenant. This structure minimizes immediate vacancy risk for AA REIT and supports the seller’s continued operations.
The acquired property is a crucial Business 1 industrial asset near the vibrant Paya Lebar commercial hub, offering superior connectivity. It comprises a multi-tenanted industrial complex featuring a four-storey and an eight-storey block, with a substantial gross floor area. Crucially, the Framework Building is classified as a “high-specification” asset, designed with flexible layouts, high power capacity, and sustainability credentials. These features make it exceptionally suitable for tenants in advanced sectors such as healthcare, life sciences, and precision manufacturing, aligning with Singapore’s economic focus on resilient, high-value industries.
For AIMS APAC REIT, the acquisition is a calculated step to enhance its portfolio resilience and improve key performance indicators. The purchase, which included a land premium payable to JTC Corporation, is projected to deliver an attractive initial net property income (NPI) yield of 8.1%, significantly above the portfolio average. Furthermore, the strategic addition of this asset is expected to result in a modest, positive distribution per unit (DPU) accretion for unitholders, solidifying the REIT’s commitment to delivering consistent income growth. It strategically diversifies AA REIT’s tenant base and increases its exposure to quality, recession-resistant industrial properties in the city fringe.
A central element of the transaction is the sale and leaseback arrangement. Following the sale, Framework Group will lease back 70% of the gross floor area for a period of five years. This allows the seller to immediately unlock significant capital from its real estate holdings—funds that can be channeled back into its core business, expansion initiatives, or debt reduction, without disrupting its operational continuity. It’s a common financial strategy used by companies to realize the value of their fixed assets while securing their long-term tenancy needs.
This deal also highlights the increasing demand for well-located, high-spec industrial assets in the Singapore market, a trend fueled by tightening vacancy rates and the global push toward supply chain resilience and advanced manufacturing. Market analysts note that the transaction was executed at a price that reflects the quality and strategic location of the asset, even while factoring in the short remaining tenure of its 30-year leasehold. The property’s attractive specifications and strong tenant covenant underscore the strategic value perceived by institutional investors like AA REIT.
Looking ahead, the Framework Building acquisition aligns with AIMS APAC REIT’s long-term strategy of disciplined, selective investment and active asset management. Beyond the immediate income boost, the modern specifications and prime location of the property offer future value-add and asset enhancement potential. As the city-fringe industrial landscape continues to evolve, the REIT is well-positioned to reposition and optimise the building further after the current leaseback period, ensuring the asset remains competitive and a long-term contributor to its growing S$2 billion-plus portfolio.
