SINGAPORE (May 15): The manager of AIMS APAC REIT (AA REIT) announced it is acquiring Boardriders APAC HQ in Queensland, Australia, from GSM Rocket Australia for a consideration of A$38.5 million ($36.9 million).
The property is acquired with a headline yield of 7.8%, a lease term of 12 years and annual rental escalation of 3.0%. The headline yield is derived from the first year net property income of A$3 million over the consideration.
The property will be leased to GSM (Operations) for 12 years on a triple net lease basis with stipulated annual rent increments and a rent review at mid-term of the lease. The tenant also has an option to renew the lease for another five years.
Both GSM Rocket and GSM (Operations) are wholly-owned subsidiaries of Boardriders, an actions sports and lifestyle company that designs, produces and distributes branded apparels.
The first year rental from the property is A$3.0 million and the consideration was arrived at on a willing-buyer and willing-seller basis.
The estimated total cost of the acquisition to AA REIT is approximately A$41.50 million ($39.84 million) which includes stamp duty payable, acquisition fee and other transaction costs.
The REIT will predominantly fund the acquisition through AUD debt facilities in order to maintain a natural currency hedge on the Acquisition.
Upon completion of this acquisition, AA REIT will own 27 industrial properties.
Koh Wee Lih, CEO of the manager says, “The proposed Acquisition represents an opportunity to further diversify and strengthen our portfolio with a strategic addition that offers a strong tenant profile and provides income stability to AA REIT. In line with our strategy to build a high-quality, diversified portfolio of assets that creates long-term value for our unitholders, the acquisition will be DPU accretive.”
“The outlook for the Gold Coast economy remains positive as the region is currently experiencing growth across key economic factors including strong population growth, investment into major infrastructure developments and an increase in both domestic and offshore tourism into the region. This investment will enable us to expand AA REIT’s footprint in a market that offers solid longterm growth,” adds Koh.
As at 11.05am, units in AA REIT are trading at $1.39.
