FRASERS LOGISTICS & IND TRUST
SGX:BUOU
Frasers Logistics & Industrial Trust - Asset Recycling At Play
- Proposed acquisition of two properties in Australia for A$62.6m.
- Young target portfolio with long WALE of 5.7 years offers income visibility.
- Proceeds from recent divestment in Australia to be re-deployed into higher and sustainable yields.
What’s New
Acquires two properties in Australia
~ SGinvestors.io ~ Where SG investors share
- Frasers Logistics & Industrial Trust (FLT) has announced the proposed acquisition of two warehouses in Australia for a combined acquisition price of A$62.6m (all-in cost of A%66.7m). The properties are
- 3 Burilda Close, Wetherill Park, New South Wale (NSW) for A$31.5m, and
- 103-131 Wayne Goss Drive, Berrinba, Queensland (QLD) for A$31.1m.
- These properties are located in key industrial markets in New South Wale and Queensland respectively.
Attractive yields of 6.5% supported by a long WALE.
- The proposed target properties are recently completed and 100% occupied. The properties are c.1 year and anchored by individual tenants on a long weighted average lease expiry (WALE) of 5.7 years.
- The initial yield of the target acquisitions is 6.5% (6.1% for the NSW property and 6.8% for the QLD property). Respective annual escalations of 3.1% and 3.0% meant that the properties offer a steady organic growth profile for FLT in the medium term.
- The vendor has also undertaken to provide incentive reimbursement depending on the actual tenancies at acquisition date.
Asset recycling strategy at play to optimise portfolio yields.
- The acquistion came on the back of the sale of two properties in Australia for a combined A$99.50m which allows the REIT to reinvest these proceeds into higher-yielding assets with more visible cashflow visibility.
- Gearing is expected to remain stable at c.36% after the acquisition.
Derek TAN
DBS Group Research
|
Carmen TAY
DBS Research
|
Mervin SONG CFA
DBS Research
|
https://www.dbsvickers.com/
2018-09-03
SGX Stock
Analyst Report
1.200
Same
1.200
