SINGAPORE (THE BUSINESS TIMES) – Ascendas Real Estate Investment Trust (Ascendas Reit) is proposing to acquire a new logistics property in Brisbane for A$70.3 million (S$70.9 million), the Reit manager announced on Wednesday (Dec 23).
The property will be developed at 500 Green Road, Crestmead, by Goodman Property Services (Aust) and is expected to be completed in the fourth quarter of 2021. The consideration of A$70.3 million comprises the land and development cost and is in line with the “as if complete” market valuation of the property.
It will have a flexible design, offering warehouse sizes from 9,000 sq m to 38,000 sq m. This will allow Ascendas Reit to capture a wide spectrum of market demand, Ascendas Funds Management said in its press release.
“This acquisition extends our logistics footprint in key distribution markets that will benefit from the robust domestic consumption and e-commerce demand in Australia,” said Mr William Tay, executive director and chief executive officer of the Reit manager.
He added that the property is targeting to achieve a five-star Green Star rating when completed, and the rating will enhance the overall quality of Ascendas Reit’s Australian portfolio. It will be Ascendas Reit’s 10th logistics property in Brisbane and will increase the Brisbane logistics portfolio’s net lettable area by 21 per cent to 220,532 sq m.
Ascendas Reit is expected to incur an estimated transaction cost of A$1.4 million for the acquisition. Net property income yield for the first year is approximately 5.6 per cent (pre-transaction costs) and 5.4 per cent (post-transaction costs).
The annualised pro forma impact on FY2019 distribution per unit would be an estimated improvement of 0.014 Singapore cent, assuming the proposed acquisition was acquired and completed on April 1, 2019.
Units of Ascendas Reit closed flat at $2.95 on Wednesday before the announcement.
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