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MLT to acquire Brisbane warehouse for A$114m
THE manager of Mapletree Logistics Trust (MLT) has announced that it intends to acquire a warehouse in Brisbane, Australia, for A$114 million via the acquisition of all the units in the property trust holding the property from Alset Australian Mid TC.
Following this acquisition, MLT will have three properties in Brisbane and a total of 13 properties with over 347,287 square metres of leasable space in Australia.
MLT said that the property, Acacia Ridge Distribution Centre, provides convenient access to key transportation infrastructure. The location is expected to benefit from the high-capacity inland freight rail connecting Melbourne and Brisbane. Due to be fully operational in 2026, it is expected to increase rail freight between Melbourne and Brisbane and boost demand for warehouse space in the precinct.
The property is purpose-built to modern logistics specifications, including height clearance of 8 to 12 metres and floor loading of 3 tonnes per square metre. It comprises two buildings with a gross floor area of 55,009 sq m; the freehold plot it sits on is about 110,000 sq m in size. The facility is designed to be modular and highly versatile to support flexible leasing solutions, said MLT.
The property is fully leased to three established local industry players with a weighted average lease expiry of 5.3 years by net lettable area and annual rent escalations. These will provide MLT with a stable and growing income stream.
Woolworths Group, Australia's largest supermarket chain, has leased 84 per cent of the property's gross floor area to support its operations in Queensland and northern New South Wales. The remaining space is leased to an ASX-listed digital marketing company and a large privately owned freight forwarder in Australia.
The property has been valued at A$114 million by Savills Australia as at Oct 15, 2020. At the property purchase price of A$114 million, the acquisition is expected to generate an initial net property income yield of 4.9 per cent.
MLT said that the Covid-19 pandemic has spurred a major uptick in online shopping, particularly in the food, beverages and groceries. Surging sales of major supermarket players as well as consumer demand for fast delivery are translating to higher demand for prime logistics space with good connectivity, it said.
The acquisition is expected to be completed by the fourth quarter of the 2020/21 financial year, subject to the Australian Foreign Investment Review Board's approval. It will be funded by debt and is expected to be accretive at the distribution level.
Upon completion, MLT's aggregate leverage ratio is projected to be approximately 37.4 per cent.