The second acquisition comprises stakes in two funds, a 49.5% stake in New LAIVS Trust, and 40% of Oxford Property Fund. These funds own five logistics properties in New South Wales and Victoria between them. New LAIVS Trust owns four properties while Oxford Property Fund one property. The cost of the two stakes is the equivalent of $178.5 million. Investing in property funds is permissible so long as the AUM does not exceed 25% of deposited properties. On a pro forma basis, ALOG would still have 89% of deposited properties invested in income producing real estate.
It wasn’t a hat-trick industry watchers were hoping for. After two accretive transactions that were announced in October by Elite Commercial REIT and Mapletree Logistics Trust, the third and latest transaction seems dilutive for unitholders, is likely to raise gearing and could cause investors to examine the proposals more carefully.
On Oct 26, ARA LOGOS Logistics Trust (ALOG) announced plans to make two acquisitions. The first is a portfolio of five logistics properties in Brisbane. Altogether, the price of this portfolio is the equivalent of $225.9 million. According to Colliers, the valuation of the property portfolio is A$245.1 million ($237.3 million) with a couple of rental guarantees and A$242.6 million excluding the rental guarantees. Interestingly, four of the five properties have leasehold tenures ranging from 39 to 42 years lease. Only one property is freehold.
