This article is from the Australian Property Journal archive
SINGAPORE Exchange-listed Mapletree Logistics Trust has made a foray into Australia the purchase of the Coles distribution centre in Eastern Creek Sydney for $253 million on a 5.6% yield.
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:”;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”,”serif”;
mso-fareast-language:EN-US;}
The property was sold by Brickworks and the Goodman Australia Industrial Fund. Comprising two blocks of single-storey cold store warehousing facilities, the property has a total gross floor area of 55,395 sqm occupying a 165,200 sqm site, of which 15,000 sqm of reserve land can potentially yield an additional GFA of 7,000 sqm for future expansion.
The facility offers frozen and chilled warehousing with temperature control of 2°C to -23°C and is leased to Coles with 19-years remaining on the lease.
MLTM CEO Ng Kiat said the acquisition of facility will provide a significant high quality, long WALE asset to anchor MLT’s expansion into the Australian market, which offers growth potential and scalability.
“This acquisition will serve as a springboard for further expansion into Australia, which could potentially become a new core market for MLT, adding geographic and income diversification to our existing portfolio.
“This strategically located asset with high quality specifications also allows us to increase the pace of our efforts to rejuvenate the portfolio, by recycling capital released from selective divestments of older, low yielding assets, into acquisitions of better quality, higher yielding assets, such as Coles CDC,” she added.
“Its exceptionally long lease tenure of 19 years with built-in annual rent increments from a lessee of strong credit standing provides long-term cash flow certainty. It also diversifies our tenant base with the addition of a blue-chip tenant,” Ng said.
The acquisition will increase MLT’s portfolio weighted average lease expiry from 4.2 years to 4.5 years as well as increase the number of properties to 120 with a book value of approximately S$4.95 billion.
Goodman Australia general manager Jason Little said the sale is consistent with GAIF’s strategy of selectively rotating assets within its portfolio and recycling the capital into new high quality properties from Goodman’s development pipeline.
“With $5.7 billion of assets under management, the sale and reinvestment of the proceeds enables GAIF to achieve its targeted returns to investors,” he said.
Brickworks managing director Lindsay Partridge said releasing capital from stabilised assets such as the Coles CDC facility enables the company to reduce gearing in the property trust or at the Brickworks level.
“The reduced gearing will also provide equity to facilitate the ongoing development of vacant trust land and other development land held within the group.
“The reduction in rental income following this sale is expected to be partially offset by the development of two new facilities at Eastern Creek in due course.” Partridge said.
Australian Property Journal
