Frasers Logistics & Commercial Trust (FLCT) has acquired a business park development asset in the West Midlands, UK for GBP28.3 million (SGD51.5 million).

The asset is located within the Worcester Six business park and it was acquired from an unrelated third party at valuation as appraised by CBRE.

The development is expected to be completed in the first quarter of 2023, said the REIT.

When developed, it will feature a total lettable area of 180,121 square feet on a 3.48-hectare site.

Upon completion, it will be leased to Alliance Flooring Distribution Limited on a new 15-year tenure, subject to five yearly upward only rent reviews, the REIT indicated.

It will be FLCT’s second warehouse property in the UK, increasing the REIT’s exposure to the UK market to 10.9% of its total portfolio value, from 10.2% prior to this.

It will be funded with debt and internal cash resources.

“The acquisition through a forward funding agreement for a prime, freehold high-specification facility in the UK is the continuation of our strategy to grow FLCT’s core logistics and industrial portfolio in existing markets”, said Robert Wallace, CEO of the REIT’s manager.

“With a committed lease term of 15 years to an international distributor of flooring products, the proposed acquisition is expected to further enhance FLCT’s portfolio metrics while providing unitholders with a stable and long-term income stream”, he added.

FLCT was last done on the SGX at SGD1.47, which presently implies a distribution yield of 5.41% according to data on the Singapore REITs table.