Singapore-listed industrial REIT, Cache Logistics Trust (SGX:K2LU), announced on 27 November that it has entered into a sale and purchase agreement to acquire a warehouse property in Queensland, Australia for AUD9.575 million (SGD9.6 million).

The property, a single-storey warehouse located at 223 Viking Drive, Wacol, is being acquired from Australian company Muzzie Pty Ltd. It is situated 18 km southwest of the Brisbane Central Business District and features approximately 6,276 square metres of gross leasable area.

“The acquisition represents an opportunity for Cache to acquire a warehouse with freehold tenure and located in a sought-after industrial precinct within Queensland, Australia, and located immediately adjacent to the previously acquired property at 203 Viking Drive”, said the REIT in a statement on the acquisition.

223 Viking Drive has a weighted average lease expiry (WALE) by lettable area of 7.7 years as at 27 November 2015 and will extend Cache Logistics Trust’s portfolio WALE from 4.42 years to 4.46 years. The property will also be leased to Western Star Trucks Australia Pty Ltd until August 2023 with a fixed annual rental escalation of 4.0% or the consumer price index - whichever is higher. Western Star Trucks is also the tenant at 203 Viking Drive.

“In the first year, the property is expected to generate a net property income (NPI) yield of approximately 7.1%”, said the REIT.

Cache Logistics Trust has indicated that it intends to finance the acquisition, which will cost approximately SGD10.5 million including cost and fees, through bank borrowings and equity proceeds from the private placement launched on 3 November 2015. The REIT’s aggregate leverage of will rise from 35.6% to 36.0% upon acquisition.

Units of Cache Logistics Trust ended the trading day 1.1% higher from its previous close on the Singapore Exchange to finish at SGD0.92.