ESR-REIT's proposed AUD276.8 million (SGD247.9 million) purchase of five Melbourne logistics properties has been pitched to as a distribution-boosting deal, with the manager projecting a 4.3% increase in distribution per unit (DPU) on a pro forma basis.
But a detail disclosed in the 7 July 2026 announcement suggests that gain could be trimmed to just 1.3% if the manager follows through on a mooted plan to shore up its balance sheet.
ESR-REIT disclosed that the acquisitions, comprising freehold logistics assets in Truganina, Derrimut and Keysborough, will be entirely debt-funded at completion, pushing the REIT's aggregate leverage to approximately 41.9%, still within its target range but a meaningful step up from current levels.
To manage that higher gearing, the manager said it may issue up to SGD175.0 million of subordinated perpetual securities, which would bring leverage back down to roughly 38.5%.
Related: ESR-REIT completes sale of seven Singapore industrial properties
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