SINGAPORE (July 1): The manager of Ascendas REIT (A-REIT) announced that it has acquired a new logistics property to be developed on Lot 7, Kiora Crescent, Yennora, in Sydney, Australia for a purchase consideration of A$23.5 million ($21.1 million) on Wednesday.
The agreement was signed by Perpetual Corporate Trust Limited as the trustee of Ascendas Longbeach Trust No. 10, which is wholly-owned by Ascendas REIT Australia.
The property will be developed by Larapinta Project.
According to the filing on SGX, A-REIT says the consideration, which includes the cost of the land and the development, is said to be 19.8% lower than the “as if complete” market valuation of the property, which is at A$29.3 million as at June 30.
Following the acquisition, the total transaction cost is said to set A-REIT back by an estimated A$1.43 million. This includes stamp duty and fees payable to the manager in cash.
The acquisition is expected to be accretive to the REIT’s distribution per unit (DPU).
The property is located in Yennora, an industrial precinct in inner-western Sydney. The area, which is located around 26km from Sydney’s central business district (CBD), is said to be enjoying renewed growth given its proximity to the central western part of the city.
A-REIT says the acquisition has been completed, and the development of the property is expected to be completed in the second quarter of 2021.
“Despite the COVID-19 pandemic, Sydney continues to be the strongest industrial market in Australia underpinned by robust tenant demand and sustained levels of investor interest,” says William Tay, executive director and CEO of the manager.
“The acquisition of this new prime grade logistics property gives Ascendas Reit greater exposure to the Sydney market and also enhances the quality of our portfolio,” he adds.
Units in Ascendas REIT closed 2 cents higher, or 0.6% up, at $3.19 on Wednesday, prior to the announcement.
