ESR-Reit proposes to buy additional logistics asset in Australia for US$36.7 million
This adds to its recently proposed acquisition of five logistics properties in the same area
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[SINGAPORE] ESR Real Estate Investment Trust (ESR-Reit) has proposed to buy a freehold logistics property in Melbourne, Australia, for A$52.5 million (US$36.7 million), adding to its recently proposed acquisition of five freehold logistics properties in the vicinity.
The combined six-property portfolio acquisition is expected to be around 5.1 per cent distribution per unit (DPU) accretive on a pro forma basis, the Reit’s manager said on Thursday (Jul 23).
The manager noted that the age of the asset most recently proposed for acquisition at 18 Foxley Court is around nine years. It has an occupancy rate of 100 per cent and a portfolio’s weighted average lease expiry of 4.8 years. It is fully leased to HealthShare Victoria, an Australian government-backed statutory authority.
Unlike the five previously announced properties that were secured through a competitive open-market sales process, 18 Foxley Court was sourced off-market.
The acquisition will be funded with proceeds from the divestment of properties and debt financing. ESR-Reit previously divested eight industrial properties and a hotel strata lot in Singapore.
Following the completion of the deal, Singapore will continue to account for more than three-quarters of the Reit’s enlarged portfolio by rental income; Australia’s contribution will increase to 16.1 per cent from 12.7 per cent.
The acquisition will extend the portfolio’s weighted average land lease tenure from 44.9 years to 48.2 years. It will also increase the proportion of freehold assets in ESR-REIT’s portfolio from 19.3 to 24.2 per cent.
Units of ESR-Reit ended 2.9 per cent or S$0.07 higher at S$2.48 on Thursday, before the announcement.
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