Singapore-listed Ascendas REIT is acquiring a new logistics property to be developed in Sydney, Australia for AUD23.5 million (USD16 million).

The property will be developed by Larapinta Project Pty Ltd at Lot 7, Kiora Crescent in Yennora.

“Despite the COVID-19 pandemic, Sydney continues to be the strongest industrial market in Australia underpinned by robust tenant demand and sustained levels of investor interest”, said William Tay, CEO of the REIT’s manager.

“The acquisition of this new prime grade logistics property gives Ascendas REIT greater exposure to the Sydney market and also enhances the quality of our portfolio”, he added.

The acquisition of the land has been completed, and the development of the logistics property is expected to conclude in the second quarter of 2021, said the REIT.

The purchase consideration comprises the land and development cost, and is 19.8% lower than the “as if complete” market valuation of the property as at 30 June 2020, as appraised by Knight Frank NSW.

Ascendas REIT is expected to incur an estimated total transaction cost of AUD1.43 million from the transaction, including stamp duties and fees to the manager.

Net property income yield for the first year is approximately 6.2% and 5.8% pre- transaction costs and post-transaction costs respectively.

The Acquisition is expected to be accretive to Ascendas REIT’s distribution per unit (DPU).

It will be funded through internal resources, or existing debt facilities.

Ascendas REIT was last done on the Singapore Exchange at SGD3.19.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.