Frasers Logistics Trust to acquire 12 properties from Frasers Property for A$645 million

Euro coinsPhoto by Leslie Shaffer

Frasers Logistics & Industrial Trust entered a deal to acquire nine logistics properties in Germany and three in Australia from Frasers Property for A$644.7 million, or around S$612.5 million, the trust and developer said in filings to SGX before the market open Wednesday.

The consideration for the German properties is 320.3 million euros, or around A$519.2 million or S$493.3 million, while the Australian properties’ consideration is A$125.5 million, or around S$119.2 million, the filing said.

The funding for the acquisition, which is expected to be completed by end-August, will be a combination of equity and borrowings, the trust said.

“The proposed acquisition deepens FLT’s presence in two attractive logistics markets,” Robert Wallace, CEO of the REIT’s manager, said in the statement.
“The new properties are a strategic fit for FLT, adding more prime, modern, high-quality logistics facilities leased to reputable tenants to the existing portfolio.”

Germany is Europe’s largest logistics hub, with record take-up of logistics space of around 7.3 million square meters last year, driven by logistics, trading and manufacturing amid limited supply, the filing said.

Australia’s economy has also been well-supported by strong public infrastructure spending, non-mining investment and population growth, Frasers Logistics Trust said. The logistics market there has seen strong occupier demand, with gross take-up of 2.6 million square meters in the year ended 31 March, the trust said.

The new properties have 100 percent occupancy, with tenants across the logistics services, automotive, food logistics and industrial manufacturing sectors, the trust said, adding that included Hermes and Bosch.

The acquisition is expected to be accretive to distribution per unit (DPU), the trust said.

On a pro forma basis, including divestments made in the fiscal 2019 financial year, the fiscal first half DPU would have been 3.58 Singapore cents, compared with 3.54 Singapore cents reported for the period, the trust said.

The trust said the deal was subject to approval by unitholders at an extraordinary general meeting.

Frasers Property said in a separate SGX filing that the deal was in line with the company’s strategy to recycle capital via its REITs.

Frasers Logistics Trust has the right of first refusal over Frasers Property’s remaining 35 Australian and European logistics and industrial assets, as of end-March, the filing said.

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