A-REIT to acquire logistics facility in Sydney for $76.6 mil
By PC Lee
/ A-REIT |
Ascendas Real Estate Investment Trust (A-REIT) is acquiring a logistics property in Sydney, Australia for A$76.6 million ($76.6 million) from seller Deka Australia One GmbH.
6-20 Clunies Ross Street comprises a modern high clearance warehouse (36,220 sqm) and a freestanding two-storey office/laboratory facility (2,359 sqm) with a total gross floor area of 38,579 sqm.
The subject property
Source: A-REIT
The property is located 28km west of Sydney CBD and located within one of Sydney’s premium logistics and distribution hubs – the Holroyd Local Government Area and the Greystanes Industrial precinct. The property also has good access to the major M4 and M7 motorways and is less than an hour to Port Botany shipping terminal andSydney Airport.
The proposed acquisition is expected to generate a net property income yield of 7.1% pre-transaction costs (6.6% post transaction costs) in the first year. The annualised pro forma financial effect of the proposed acquisition on distribution per unit would be 0.007 cents for the fiscal year ended March 2015.
The property has a committed weighted average lease expiry of 6.1 years as at Nov 1 2015 and is 100% occupied. There is also a built-in step up rental escalation of between 3.5% to 4% per annum in the leases. All existing tenancies will be assigned to A-REIT upon completion of the transaction.
A-REIT is expected to incur estimated transaction costs of about A$5.4 million, which includes stamp duty, professional advisory fees and the acquisition fee payable to the manager.
“During the quarter, A-REIT has announced a total acquisition of about $1.6 billion worth of properties in Australia and Singapore ($439 million). This is in line with our strategy to enhance and diversify A-REIT’s portfolio with good quality and well-located properties. Altogether these acquisitions are expected to be DPU accretive on a proforma basis,” says Tan Ser Ping, Executive Director and Chief Executive Officer of the manager of A-REIT.
A-REIT last traded at $2.25.
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