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Frasers Logistics & Industrial Trust to sell Australian warehouse, outdoor area

FRASERS Logistics & Industrial Trust (FLT) is selling a warehouse and open-air storage and parking area in Australia for A$15 million (S$14.2 million), the manager said on Thursday.

At the same time, the manager is weighing its options for the rest of the freehold property at 610, Heatherton Road, Clayton South, in the state of Victoria.

It plans to sub-divide the site, which has a gross lettable area of 8,387 square metres.

So far, the manager has inked and announced a sale-and-purchase agreement with Mack Bros - an Australian family business involved in roofing and guttering supplies - for the site's 4,522 sq m warehouse and 12,730 sq m "hardstand" area.

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The trust will hold on to the 237-lot multi-storey carpark and the two-storey office building component, which has been vacant since April 2019 and had previously been leased to Australian engineering and service provider Zinfra Group.

The warehouse and hardstand are leased to Metro Trains Melbourne until August 2019.

The manager reported in a bourse filing that the property, about 20 kilometres south-east of central Melbourne, contributed about 1.4 per cent to FLT's net property income - which came in at A$47.9 million for the three months to March 31, 2019.

Net proceeds from the divestment - estimated at A$14.1 million - could go towards potential acquisitions, paring debt or "other general corporate purposes", said the manager.

The portion that is now being sold was valued by Savills at A$13.5 million as at Apr 15, with the sale price representing an 11.1 per cent premium over the book value.

Meanwhile, the manager said it "will continue to actively explore options" for the unsold space.

Robert Wallace, chief executive of the manager, said in a statement: "The property sits on an irregular 3.7-hectare site ... Given the specialised nature of the property and after exploring different options, we intend to sub-divide the property into two lots."

He added that the sale is subject to the authorities accepting the sub-division plans.

The deal is expected to go through by the end of the financial year, which runs to Sept 30, and is not expected to materially affect the net asset value and distribution per unit for the year.

FLT has a portfolio of more than 82 properties in Australia, Germany and the Netherlands.

The Heatherton Road property was redeveloped in February 2008 by mainboard-listed sponsor Frasers Property and later injected into the real estate investment trust's portfolio.

The counter closed down S$0.02 or 1.71 per cent to S$1.15 on Thursday before the announcement.