Ascendas Reit divests three logistics properties in Australia
Proposed divestments in line with proactive asset management strategy to improve the quality of Australian portfolio and optimise returns for unitholders
Singapore, 3 June 2021 – Ascendas Funds Management (S) Limited (the Manager), the manager of Ascendas Real Estate Investment Trust (Ascendas Reit) is pleased to announce that it has today entered into two separate agreements with unrelated purchasers for the sale of two logistics properties (82 Noosa Street and 62 Stradbroke Street) located in Brisbane and one logistics property (1314 Ferntree Gully Road) located in Melbourne, Australia (collectively the Properties), for a total sale price of S$128.7 million1 (A$125.1 million) (Proposed Divestments).
The Proposed Divestments are in line with the Manager’s proactive asset management strategy to improve the quality of Ascendas Reit’s Australian portfolio and optimise returns for Unitholders.
Details of the Proposed Divestments
The Trust Company Limited (in its capacity as trustee of Ascendas Longbeach Trust No.7) has entered into a sale agreement with SIRE (Strategic Industrial Real Estate), an Arrow Capital Partners vehicle in cooperation with Altis Property Partners, for the sale of two logistics properties located at 82 Noosa Street and 62 Stradbroke Street in Brisbane, Australia, for S$104.5 million (A$101.6 million).
Separately, The Trust Company Limited (in its capacity as trustee of Ascendas Logistics Trust 3) has entered into a unit sale agreement with China Tube Pty Ltd and Haelram Pty Ltd for the sale of units in the sub-trust which holds a logistics property located at 1314 Ferntree Gully Road in Melbourne, Australia, for S$24.2 million (A$23.5 million).
The total sale price of A$125.1 million is approximately 16.8% higher than the total market valuations of the Properties of A$107.1 million2 as at 31 December 2020.
The Proposed Divestments are expected to complete by 3Q 2021 and are not expected to have any material effect on Ascendas Reit’s net asset value and distribution per unit (DPU) for the financial year ending 31 December 2021.
Assuming the Proposed Divestments were completed on 1 January 2020, the annualised proforma impact on Ascendas Reit’s net property income would have been a decrease of S$5.1 million and distribution per Unit would have decreased by 0.075 Singapore cents for the financial year ended 31 December 2020.
Net proceeds after divestment costs are expected to be S$124.0 million (A$120.5 million). The proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs and/or make distributions to Unitholders. If the net proceeds were used to repay Ascendas Reit’s borrowings as at 31 March 2021, its aggregate leverage will be reduced from 38.0% to approximately 37.5%.
In accordance with Ascendas Reit’s Trust Deed, the Manager is entitled to a divestment fee of 0.5% of the total sale price of the Properties, which would be paid in cash.
Following the Proposed Divestment, Ascendas Reit will own 95 properties in Singapore, 34 properties in Australia, 30 properties in the United States and 49 properties in the United Kingdom/Europe.
About the Properties
82 Noosa Street and 62 Stradbroke Street, Brisbane
82 Noosa Street and 62 Stradbroke Street are located in Heathwood, approximately 20 kilometres south-west of Brisbane’s central business district, and have direct access to the Logan motorway. They were acquired as part of a portfolio acquisition in October 2015.
82 Noosa Street has a lettable floor area of 38,000 sqm across two standalone warehouses. 62 Stradbroke Street features two standalone warehouses linked by a central canopy and has a lettable area of 24,555 sqm.
1314 Ferntree Gully Road, Melbourne
1314 Ferntree Gully Road was acquired in June 2018 and is situated in the established industrial precinct of Scoresby, in Melbourne’s eastern suburbs. It is located approximately 30 kilometres east of the Melbourne Central Business District, 37 kilometres from the Port of Melbourne and 53 kilometres from the Melbourne Airport. The property comprises three levels of office, a low-bay 6 metres clearance warehouse and an ultra-high bay 15 to 16 metres clearance warehouse that is fully racked. It has a lettable floor area of 16,134 square metres.
Notes:
1 An illustrative exchange rate of A$1.000: S$1.029 is used for all conversions from Australian Dollar amounts into Singapore Dollar amounts in this press release.
2 The valuations for the Properties were commissioned by the Manager and HSBC Institutional Trust Services (Singapore) Limited (as trustee of Ascendas Reit), and were carried out by Knight Frank Australia Pty Ltd using the capitalisation approach and discounted cash flow approach.