Cache Logistics Trust to acquire nine properties in Australia for A$177.6m

CACHE Logistics Trust said it has agreed to acquire a portfolio of nine logistics properties located in the Australian states of Victoria, New South Wales and Queensland for A$177.6 million (S$188.3 million).

Including stamp duties and other expenses, the total acquisition cost will amount to A$191 million (S$203 million).

With an initial net property yield of 6.4 per cent, this portfolio of nine properties span 142,103 sq m (1.53 million sq ft) in gross lettable area.

The latest acquisition would almost double Cache's assets under management in Australia, from A$195.9 million to A$373.5 million. It will also raise Cache's portfolio valuation by about 15.6 per cent to S$1.4 billion, with the Australian assets making up 28 per cent of the total portfolio.

"The yield-accretive transaction not only provides income and geographical diversification to Cache but further enhances its base of high-quality logistics tenants and end-users," said Daniel Cerf, CEO of the Reit manager. "Cache is well-positioned to ride on foreseeable growth in the industrial sector in Australia which is supported by a stable economy and strong investments in infrastructure."

The target portfolio has a weighted average lease to expiry (WALE) of five years and a strong occupancy of 98.1 per cent. This will extend the WALE of Cache's enlarged portfolio from 3.2 years to 3.4 years. The proportion of freehold properties within Cache's portfolio will also increase from 22 per cent to 35 per cent.

This target portfolio comes with annual rental escalations of 2-3.5 per cent, generally higher than leases signed in Singapore.

The Reit manager said it intends to fund the proposed acquisition with a combination of a new S$110 million five-year unsecured term loan facility and the remainder via proceeds from the recent issuance of Cache's subordinated perpetual securities.

This acquisition is expected to complete by end of February.