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Ascendas REIT divests three Australian logistics properties for $129 mil

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Photo credit: Ascendas REIT

SINGAPORE (EDGEPROP) - The manager of Ascendas REIT (A-REIT) has on June 3 entered into two separate agreements for the sale of two logistics properties located in Brisbane and one logistics property in Melbourne for a total sale price of A$125.1 million ($128.7 million). (See: Ascendas Reit to acquire remaining 75% interest in Galaxis for $534.4 mil)

The manager states that the divestments are in line with its asset management strategy to improve the quality of the REIT’s portfolio and optimise returns for unitholders.

The Brisbane properties, located at 82 Noosa Street and 62 Stradbroke Street, are being purchased by Strategic Industrial Real Estate, an Arrow Capital Partners vehicle in cooperation with Altis Property Partners, for A$101.6 million

For the Melbourne property, located at 1314 Ferntree Gully Road, private companies China Tube and Haelram will be purchasing units in the sub-trust that holds the property for A$23.5 million.

The total sale price of A$125.1 million is approximately 16.8% higher than the total market valuations of the properties of A$107.1 million as at Dec 31, 2020.

The proposed divestments are expected to complete by 3Q2021 and are not expected to have any material effect on A-REIT’s net asset value and distribution per unit (DPU) for the FY2021 ending December.

Assuming the proposed divestments were completed on Jan 1, 2020, the annualised proforma impact on A-REIT’s net property income would have been a decrease of $5.1 million, while DPU would have decreased by 0.075 cents for the FY2020.

Net proceeds after divestment costs are expected to amount to $124 million. The manager states that the proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs and/or make distributions to unitholders.

In accordance with A-REIT’s Trust Deed, the manager is entitled to a divestment fee of 0.5% of the total sale price of the properties, which would be paid in cash.

Following the proposed divestment, A-REIT will own 95 properties in Singapore, 34 properties in Australia, 30 properties in the US and 49 properties in the UK and Europe.

Units in A-REIT closed 1 cent or 0.34% higher at $2.92 on June 3.

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