Frasers Logistics & Industrial Trust (FLT) is divesting 50% of its ownership in 99 Sandstone Place, Parkinson, Queensland for AUD134.2 million.

The property is a cold storage distribution facility, and is leased to Coles Group Ltd.

The sale consideration represents an 8.8% premium over the book value of AUD123.3 million as at 31 March 2019, and a 15.3% premium over the original purchase price of AUD116.4 million.

After divestment, the REIT will enter into a partnership with DWS to co-own and co-manage the property.

Upon divestment FLT’s exposure to Coles Group leases is expected to reduce from 3.6% from 7.0%.

As such, the divestment provides a strategic opportunity for FLT to reduce its portfolio’s tenant concentration risk, said the REIT.

Net proceeds from the divestment is approximately AUD128.8 million, after taking into account divestment fees of approximately AUD0.7 million to be paid to the REIT’s manager.

The proceeds may be distributed to unitholders, fund acquisitions, or deployed towards reducing debt said the REIT.

The divestment is expected to be completed in 3Q 2019.