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CACHE Logistics Trust is in the process of acquiring a single-storey warehouse with ancillary office space in the suburb of Melbourne, Australia for A$22.25 million (S$24.27 million).
The proposed acquisition will be funded by net proceeds from the recent divestment of Cache Changi Districentre 3, the trust manager ARA-CWT Trust Management said in a release on Wednesday evening.
The warehouse is located in the Laverton North suburb, some 18 km west of Melbourne's central business district, and is purchased from Challenger Life CDI Nominees Pty Limited, which is a trustee for Challenger Diversified Property Trust.
It is situated on a land area of 36,250 square metres with a gross lettable area of 20,723 square metres.
The freehold property has specifications that include a warehouse ceiling height clearance of 9.3 metres, cross-dock features as well as 19 loading/unloading bays.
The property is being purchased with tenancy where 100 per cent of the lettable area is leased to homeware retail chain Spotlight Pty Ltd. The current lease with Spotlight is for a 10-year tenure which commenced on July 1, 2011 with two six+six years renewal options. The remaining lease term is approximately 4.5 years by net lettable area.
The acquisition will expand Cache's footprint in Australia where it owns and manages six other warehouses, said Daniel Cerf, chief executive of Cache's manager. "With a WALE (Weighted Average Lease to Expiry) of 4.5 years and fixed annual escalations of 3.25 per cent, the acquisition, when completed, will provide stable and growing income to our unitholders."
Cache Logistics Trust's counter rose by one Singapore cent to close at S$0.820 on Wednesday.