Frasers Logistics & Commercial Trust to acquire three Australia logistics properties

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Frasers Logistics & Commercial Trust (FLCT) has entered a deal to acquire three fully occupied logistics and industrial properties in Truganina, Victoria, Australia, from West Industry Park for A$61 million, or around S$60.4 million, the REIT said Friday.

An independent valuation by Savills Valuations valued the properties at A$61.1 million as of end-May, the REIT said in a filing to SGX.

“This investment marks a continuing deployment of our divestment proceeds from the sale of Cross Street Exchange in Singapore and will provide FLCT with further exposure to the attractive Melbourne logistics and industrial market,” Robert Wallace, CEO of the REIT’s manager, said in the statement. “The new properties are of smaller tenancy sizes, providing a product offering that targets a differentiated tenancy base, making the new properties a complementary fit with FLCT’s existing industrial portfolio.”

The acquisition will be fully funded from the divestment proceeds of the Cross Street Exchange property in Singapore, the filing said.

The properties, which were completed in early May and are fully leased to four tenants, are in Truganina, an industrial precinct in Melbourne’s West, around 20 kilometers from Melbourne’s central business district, the filing said. The precinct currently has a vacancy rate of less than 1 percent, the REIT said, citing data from CBRE.

The leases include annual rent increments of 3 percent, the filing said.

The acquisitions will bring FLCT’s total portfolio exposure to logistics and industrial properties to 66.3 percent, up from 66 percent before the deal, the filing said.

The deal is expected to be completed by the third quarter of this year, FLCT said.