ARA Logos Logistics Trust to divest Kidman Park property in Australia for A$41.5m

ARA Logos Logistics Trust (ARA Logos) has on Sunday entered into an agreement with 1835 Capital, a South Australian based property developer and investor, to divest its property located at 404-450 Findon Road, Kidman Park, Australia for A$41.5 million (about S$42.6 million).

The proposed sale consideration is about 3.8 per cent above the A$40 million valuation conducted by CBRE as at Dec 31, 2020, the manager said in a bourse filing on Monday.

After taking into account the associated taxes and expenses, net proceeds from the sale would be about A$40.5 million, with an estimated divestment gain of about A$400,000 over the latest book value, as at Dec 31,2020. The proceeds may go towards funding new acquisitions, repaying debt and working capital, the manager said.

This is the ARA Logos' second proposed divestment announcement in less than a week. On Thursday the trust entered into an agreement with local agri-food company PGI Holdings to divest ALOG Changi DistriCentre 2 for S$16.7 million.

According to ARA Logos, the deal is in line with its strategy to build a more resilient portfolio. It has been selectively divesting "lower-performing" properties with "limited growth potential" over the past few years.

Completed in 1964 and added to ARA Logos' portfolio in 2015, the Kidman Park property is freehold, with a total land area of 119,170 square metres (sq m) and a gross floor area of 58,795 sq m. It comprises a cold store warehouse space with ancillary offices.

The proposed divestment is classified under disclosable transactions but is not subject to unitholders' approval. It is expected to be completed by H1 2021.

Units of ARA Logos opened 0.7 per cent or half a Singapore cent higher at 75.5 cents as at 9.07am on Monday.