Frasers Logistics exercises call option to acquire Martin Brower property near Sydney for $62 mil
By PC Lee / theedgemarkets.com.sg | November 30, 2016 : 9:18 PM MYT
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SINGAPORE (Nov 30): Frasers Logistics & Industrial Trust (FLT) has expanded its property portfolio by acquiring a new prime industrial facility in New South Wales with a 20-year lease, the longest in its portfolio.
Frasers Logistics & Industrial Asset Management, FLT’s manager announced in a filing on Wednesday night it has exercised the call option to acquire the property at 1 Burilda Close, Wetherill Park, Sydney, also known as Martin Brower property, for A$58.2 million ($61.8 million) for inclusion into the REIT.
Upon the completion of the acquisition of the Martin Brower property, FLT’s Distribution Per Unit (DPU) for the three months ended Sept would have increased to 1.44 cents post-transaction from 1.41 cents.
Robert Wallace, Chief Executive Officer of the REIT manager, said, “Our strategy to grow our portfolio remains well on track. The newly completed Martin Brower Property will have an immediate and positive impact to FLT’s Distribution Per Unit.”
The Martin Brower property has a land tenure of 90 years and a GLA is 18,848 sq m. Located 45 km from Sydney’s central business district, the property has excellent road transport links due to its proximity to the major M7 and M4 Motorways.
The property is fully leased to Martin-Brower Australia for a term of 20 years. Martin Brower is one of the top end-to-end supply chain management solutions companies in the United States and a key supplier of McDonald’s.
The completion of the acquisition enlarges the FLT portfolio to 54 properties with a total gross lettable area (GLA) of 1.2 million sqm. FLT’s portfolio value also increases by 3.5% to A$1.7 billion.
In addition, the total portfolio now have a longer WALE of 7.0 years as compared to 6.6 years; younger average portfolio age of 6.2 years as compared to 6.5 years; and higher occupancy rate of 99.3% from 99.2%.
The acquisition was funded by A$41.0 million debt which was drawn down from FLT’s five-year revolving credit facility and A$20.5 million from FLT’s working capital.
Following the acquisition, FLT’s aggregate leverage will increase from 28.2%, as Sept 30 to 29.8% which still provides FLT with adequate headroom for growth.
Units of FLT closed 1 cent higher at 92 cents on Wednesday.
