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Ascendas Real Estate Investment Trust (A-Reit) proposed to acquire a logistics property in Sydney, Australia for A$76.6 million (S$77.9 million) from Deka Australia One GmbH.
Located at 6-20 Clunies Ross Street, Pemulwuy, the property has a total gross floor area of 38,579 sq m, featuring a modern high clearance warehouse (36,220 sq m) and a freestanding two-storey office/laboratory facility (2,359 sq m). It is A-Reit’s 10th logistics facility in Sydney and its 27th in Australia.
“It is another premium quality property with characteristics similar to our earlier acquisitions in Australia, such as freehold land, long weighted average lease expiry (WALE) of 6.1 years and triple net leases,” said Tan Ser Ping, Executive Director and Chief Executive Officer of Ascendas Funds Management (S) Limited, A-Reit’s manager.
“Furthermore, current tenants in the property are two reputable Government-related entities, Australia Post and New South Wales Police. Australia Post has subleased their space to an established Australian retailer, Target, which uses it as its major distribution facility.”
During the quarter, A-Reit revealed that it has acquired S$1.6 billion worth of properties in Australia (S$1.15 billion) and Singapore (S$439 million).
“This is in line with our strategy to enhance and diversify A-REIT’s portfolio with good quality and well-located properties. Altogether these acquisitions are expected to be DPU accretive on a proforma basis,” explained Tan.
A-Reit expects to incur an estimated transaction costs of around A$5.4 million (S$5.5 million). It also expects the proposed acquisition to generate a net property income yield of around 7.1 percent pre-transaction costs (6.6 percent post transaction costs) in the first year.
Meanwhile, the proposed acquisition’s annualised pro forma financial effect on distribution per unit stands at 0.007 cents.
It expects to complete the proposed acquisition in 1H 2016, subject to receipt of Australian Foreign Investment Review Board clearance.
Following the proposed acquisition, the weighted average lease term to expiry of A-Reit is expected to increase to 3.85 years from 3.83 years. It will own a total of 27 properties in Australia, two business parks in China and 102 properties in Singapore.
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