AIMS APAC REIT enters into buy-and-leaseback agreement for Gold Coast property

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AIMS APAC REIT (AA REIT) has entered into a sales and purchase contract with GSM Rocket Australia to acquire Boardriders APAC HQ for AUD38.46 million (SGD36.92 million).

The light industrial asset is located in the southern Gold Coast suburb of Burleigh Heads, Queensland.

It is located on a 3.33 hectare freehold site with a purpose built warehouse and office building, and a two-storey retail building, with total net lettable area of 14,833 square metres.

Once acquired, the property will be leased to GSM (Operations) Pty Ltd for 12 years on a triple net lease basis, with annual rent increments, and a rent review at mid-term of the lease.

The tenant, which will pay a first year rental of AUD3.0 million for the property, also has an option to renew the lease for another five years.

The estimated total cost of the acquisition to AA REIT is approximately AUD41.50 million including stamp duties, and other fees payable.

“The proposed acquisition represents an opportunity to further diversify and strengthen our portfolio with a strategic addition that offers a strong tenant profile and provides income stability to AA REIT, said the CEO of its manager, Koh Wee Lih.

“The outlook for the Gold Coast economy remains positive as the region is currently experiencing growth across key economic factors including strong population growth, investment into major infrastructure developments and an increase in both domestic and offshore tourism into the region”, Koh added.

AA REIT expects to fund the acquisition with AUD debt facilities in order to maintain a natural currency hedge on the acquisition.

The REIT’s aggregate leverage following the acquisition will increase from 33.7% as at 31 March 2019 to 35.5% on a pro-forma basis, assuming that it is fully funded by debt.

On completion of the acquisition, AA REIT will own a total of 27 industrial properties, of which 25 properties are located throughout Singapore, a property in Gold Coast, and a 49% interest in a property at Macquarie Park, New South Wales.

AA REIT finished the trading day on the Singapore Exchange 1.5% higher from its previous close in the wake of the news, ending at SGD1.40.

Update: AIMS APAC REIT has given further information on 15 May that the property is acquired with a headline yield of 7.8%, a lease term of 12 years, and annual rental escalation of 3.0%.

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