FLCT divests leasehold property in Melbourne, Australia for A$42.5m

FRASERS Logistics & Commercial Trust (FLCT) BUOU : BUOU 0% is proposing to divest a leasehold property in Port Melbourne, Victoria, Australia, for a consideration of A$42.5 million (S$41.7 million).

FLCT's manager has entered into a sale and purchase agreement with an unrelated third-party purchaser for the sale of the property at 2-24 Douglas Street, it said in a bourse filing on Thursday night (Dec 2).

The consideration is at a premium to the property's book value of A$21 million as at Sep 30, 2021, and to the original purchase price of A$21.7 million at FLCT's initial public offering in 2016.

The Reit (real estate investment trust) manager expects net proceeds from the investment will be A$38.5 million, which may be used to fund potential acquisition opportunities, reduce existing debt and/or other general corporate purposes.

Robert Wallace, chief executive officer of the Reit manager, noted that the divestment will provide the Reit with greater financial strength and flexibility.

"It is a timely divestment that resonates well with our strategy to realise value from non-core properties," he said.

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The property comprises 2 industrial buildings and has a total lettable area of 21,803 square metres. It had accounted for 0.7 per cent of the Reit's net property income for FLCT's financial year ended Sep 30, 2021, and as at Sep 30, it accounted for around 0.3 per cent of the Reit's portfolio value.

The proposed divestment is expected to be completed by the first half of 2022.

Units of FLCT closed at S$1.45 on Dec 2, down S$0.03 or 2 per cent.

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