Singapore-listed Cache Logistics Trust is acquiring its seventh property in Australia, a single-storey warehouse in Melbourne, for AUD22.5 million (USD17.2 million).
The freehold property features gross lettable area of 20,723 square metres (223,061 square feet) with 19 loading and unloading bays.
The warehouse, which is currently leased to single tenant Spotlight Pty Ltd, will be acquired from Challenger Life CDI Nominees Pty Limited, acting as trustee for Challenger Diversified Property Trust.
“This marks another step in our portfolio rebalancing strategy where we look to recycle capital from existing assets into higher- performing assets”, said Daniel Cerf, CEO of the REIT’s manager, in a statement on the acquisition.
“Strategically located near major transportation networks in the established Laverton North industrial precinct of Melbourne, the acquisition will expand Cache’s footprint in Australia where it presently owns and manages six other warehouses”, he added.
The current lease with Spotlight is for a 10-year tenure which commenced on 1 July 2011 with two 6+6 years renewal options, and the remaining lease term is approximately 4.5 years by net lettable area.
The lease terms also feature fixed annual rental escalations of 3.25%, said the REIT.
The acquisition will be funded by net proceeds from the divestment of Cache Changi Districentre 3.
Upon induction, the REIT’s portfolio will comprise 19 logistics warehouse properties in Singapore, Australia and China with a value of approximately SGD1.2 billion (USD0.85 billion).
Cache Logistics Trust finished the trading day about 1.2% higher from its previous close on the Singapore Exchange to end at SGD0.82.