A-Reit to buy logistics property in Sydney

Angela Tan
Published Wed, Dec 23, 2015 · 11:32 PM
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Ascendas Real Estate Investment Trust (A-Reit) intends to buy a logistics property in Sydney, Australia for A$76.6 million (S$76.6 million) from Deka Australia One GmbH.

The proposed acquisition of the property at 6-20 Clunies Ross Street, Pemulwuy - a modern 36,220 square metre high clearance warehouse and a 2,359 sqm freestanding two-storey office/laboratory facility - will be the trust's 10th logistics facility in Sydney and 27th in Australia.

"It is another premium quality property with characteristics similar to our earlier acquisitions in Australia, such as freehold land, long weighted average lease expiry (WALE) of 6.1 years and triple net leases,'' said Tan Ser Ping, executive director and chief executive officer of the trust's manager, Ascendas Funds Management.

Current tenants in the property are government-related entities, Australia Post and New South Wales Police. Australia Post has subleased their space to an established Australian retailer, Target, which uses it as its major distribution facility.

A-Reit is expected to incur estimated transaction costs of about A$5.4 million (S$5.4 million), which includes stamp duty, professional advisory fees and the acquisition fee payable to the manager which amounts to about A$0.766 million (S$0.766 million).

The acquisition is expected to generate a net property income yield of about 7.1 per cent pre-transaction costs (6.6 per cent post transaction costs) in the first year. The annualised pro forma financial effect on distribution per unit would be 0.007 Singapore cents.

The proposed acquisition is expected to complete in the first quarter of 2016, subject to receipt of Australian Foreign Investment Review Board clearance.

On completion, A-Reit will own a total of 102 properties in Singapore, 27 properties in Australia and two business park properties in China.

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