ESR-Logos Reit to divest Australia property at 18.5% premium in A$55m deal
Helene Tian
ESR-LOGOS Reit will divest 3 Sanitarium Drive in Australia for A$55 million (S$53.4 million) at a premium of 18.5 per cent to the industrial property’s fair value of A$46.4 million.
The consideration is also 61.8 per cent above A$34 million – the price paid to purchase the property in 2018.
The buyer is the Australasian Conference Association, the real estate investment trust’s manager said in a press statement on Wednesday (May 25).
The property, 3 Sanitarium Drive, is in the Berkeley Vale industrial area in New South Wales, Australia. It consists of 3 inter-connected general industrial buildings with a gross floor area of 27,762 square metres.
Net proceeds from the divestment will be used to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements, the manager added.
The divestment is in line with the Reit’s capital recycling efforts to focus on modern and in-demand new economy assets, said Adrian Chui, the chief executive and executive director of the manager.
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“Divesting this property at a premium to fair value is illustrative of our portfolio recalibration strategy to unlock value from non-core properties,” he added.
ESR-Logos Reit does not expect the divestment to have a material impact on its net asset value and distribution per unit for the financial year ended Dec 31, 2022. The manager expects the divestment to be completed in Q2 2022.
When the transaction is completed, the Reit’s diversified portfolio will comprise 83 properties located across Singapore and Australia with a total gross floor area of approximately 2.4 million square metres.
ESR-Logos Reit started trading on the Singapore bourse on May 5 following a merger between ESR-Reit and Ara Logos Logistics Trust.
The counter closed down 1.3 per cent or S$0.005 at S$0.395 on Tuesday.
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