FLCT to divest three South Australia properties for A$29.6 million

THE manager of Frasers Logistics & Commercial Trust (FLCT) has entered into a sales and purchase agreements to divest three leasehold industrial properties in South Australia, it said on Thursday.

The total consideration for the properties is A$29.6 million (S$29.5 million), which represents a 19.4 per cent premium to their book value of A$24.8 million as at Sept 30, 2020, the manager said in the exchange filing.

It is also above the total original purchase consideration of A$28.7 million at FLCT's initial public offering in 2016.

"The proposed divestments of three non-core leasehold properties in South Australia, with an attractive premium relative to market value, are part of our proactive asset management strategy and in line with our continuing focus on core industrial markets on the eastern seaboard of Australia," said Robert Wallace, chief executive officer of FLCT's manager.

"The divestment proceeds will also provide us with greater financial flexibility to manage FLCT's capital," he added.

The portfolio to be divested is located within Burbridge Business Park in the north-western corner of Adelaide Airport, which is approximately seven kilometres west of Adelaide's central business district.

As at Sept 30, the portfolio accounted for approximately 0.9 per cent of FLCT's net property income and 0.4 per cent of its portfolio value.

The proposed divestment is expected to be completed by March 31, 2021, with estimated net proceeds of around A$28.1 million, after taking into account outstanding incentives, divestment fees and other expenses.

The net divestment proceeds may be used for funding potential acquisition opportunities, reducing existing debt and/or other general corporate purposes, the manager said.

FLCT units closed at S$1.35 on Wednesday, down S$0.01 or 0.7 per cent.