10 Butu Wargun Drive, a property that will be included in the initial portfolio of Frasers Logistics & Industrial Trust (Photo: Frasers Property Australia)

Frasers Logistics & Commercial Trust (FLCT) has entered into a sale and purchase agreement with an unrelated third-party to dispose of the leasehold asset at 2-24 Douglas Street, Port Melbourne for AUD42.5 million.

The sale consideration is a significant premium to both the property’s book value of AUD21.0 million (SGD20.6 million) as at 30 September 2021 and the original purchase price of AUD21.7 million at the REIT’s initial public offering in 2016.

The proposed divestment of this non- core leasehold property is also in line with the REIT’s proactive asset management and portfolio rebalancing strategies, FLCT said in its statement on 2 December.

“It is a timely divestment that resonates well with our strategy to realise value from non-core properties”, said Robert Wallace, CEO of FLCT’s manager.

“The divestment will also provide us with greater financial strength and flexibility”, he added.

The estimated net proceeds from the divestment is approximately AUD38.5 million.

The net divestment proceeds may be used for funding potential acquisition opportunities, reducing existing debt, or other general corporate purposes, said the REIT.

The proposed divestment is expected to be completed by the first half of 2022.

FLCT was last done on the SGX at SGD1.45, which presently implies a distribution yield of 5.49% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.