The manager of Frasers Logistics & Commercial Trust BUOU (FLCT) has announced the REIT’S proposed acquisition of a prime logistics property from an unrelated third party, Diamond Land.
The property, which is situated at 2 Tuas South Link 1, Singapore, has a purchase consideration of approximately $140.3 million. The purchase consideration represents a discount of 2.5% from the appraised value of the property at $143.8 million, according to an independent valuation conducted by Knight Frank as at Sept 30.
The property comprises a six-storey ramp-up logistics facility with a total net lettable area (NLA) of 56,203 sqm. Currently, it has an occupancy rate of 85.8%6 with a weighted average lease expiry (WALE) of approximately 1.8 years, as at Sept 30.
Upon completion, the acquisition is expected to bring FLCT’s total portfolio logistics and industrial exposure up to 71.5% from 70.9% and increase the REIT’s Singapore exposure to 11.6%.
Anthea Lee, CEO of the manager, says: “This DPU-accretive acquisition marks FLCT's entry into Singapore’s robust logistics and industrial market via a prime logistics property. It aligns with our commitment to grow FLCT’s logistics and industrial portfolio.”
She adds: “Located in proximity to the Tuas Mega Port, this acquisition will position FLCT to capitalise on the strong demand for logistics in Singapore while increasing the income stream derived from Singapore properties.”
See also: IREIT signs 20-year lease contract with UK hotel chain, Premier Inn, in Berlin Campus
According to the manager, the acquisition “aligns with FLCT's strategic objective to expand its logistics and industrial portfolio in developed countries” and will increase the proportion of income FLCT derives from Singapore properties, which will reduce its exposure to foreign exchange volatility.
The proposed acquisition is set to be funded through external debt financing and is expected to be complete by 1QFY2025.
Shares in FLCT closed flat at $1.12 on Oct 17.
