Frasers Logistics Trust to acquire two Australia properties for A$62.6 million

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Frasers Logistics & Industrial Trust plans to acquire two industrial properties in Australia from Frasers Property Australia, a wholly owned subsidiary of its sponsor, Frasers Property, for a total A$62.6 million, or around S$61.8 million or US$45.02 million, the trust’s manager said in a filing to SGX after the market close on Friday.

The properties are at 3 Burilda Close, Wetherill Park, New South Wales, with an acquisition price of A$31.5 million, and at 103-131 Wayne Goss Drive, Berrinba, Queensland, with an acquisition price of A$31.1 million, it said. The purchase price was supported by independent valuations by CBRE Valuations and Urbis Valuations, it said.

“We are pleased to strengthen our footprint in Australia’s eastern seaboard with the addition of two prime and modern industrial properties which are strategically located in established industrial precincts,” Robert Wallace, CEO of the REIT manager, said in the statement. “Sydney and Brisbane continue to be core markets for FLT, and in the last 12 months both markets have seen strong market demand with limited supply.”

Wallace said the new properties would be accretive to distribution per unit.

The NSW property is a long leasehold asset, with the 90-year leasehold tenure starting from mid-2017, it said, adding it has a gross lettable area (GLA) of 20,078 square meters and a weighted average lease expiry (WALE) of 7.0 years as of the end of June, it said.

The Queensland property is a freehold asset occupying a GLA of 19,487 square meters and a WALE of 4.2 years as of the end of June, it said.

Each property is leased to two individual tenants with average fixed annual rental increments of 3.1 percent and 3.0 percent per annum, respectively, it said, adding the tenants have strong covenants and enhance the tenant mix.

After the acquisition, which is considered an interested-party transaction, Frasers Logistics Trust will have 82 properties with a total GLA of around 1.9 million square meters and a portfolio value of around A$2.9 billion as of the end of June, it said.

The approval of FLT’s unitholders isn’t required for the transaction because it is less than 5 percent of the trust’s latest audited net asset value of A$1.3 billion, as of end-September 2017, it said.

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