Frasers Logistics & Commercial Trust (FLCT) plans to acquire six freehold properties located in Germany, the Netherlands, and the UK for a total purchase price of approximately $548.7 million.
They include three logistics and industrial assets in Germany and one in the Netherlands which are being purchased from Frasers Property, FLCT’s sponsor.
The remaining two properties - a business park and a logistic and industrial property - are located in the UK and are being purchased from subsidiaries of I.M. Properties, a vendor unrelated to FLCT.
The total purchase price, based on 100% effective interest, represents a discount of approximately 2.5% to the properties’ appraised value of $562.4 million.
Taking into account adjustments for the effective interests held by Frasers Property in the companies owning the Germany and Netherlands assets, along with outstanding intercompany loans, the total purchase consideration is approximately $469.7 million. Frasers Property will be divesting the assets for approximately EUR93.6 million ($150.92 million).
SEE:Analysts positive on Frasers Logistics & Commercial Trust on growth prospects
The proposed acquisition is expected to be completed by June.
The proposed acquisition is expected to be distribution and net asset value per unit accretive. “The new properties are complementary to FLCT’s portfolio and provides FLCT with a long-term income stream from a lineup of highquality and diversified tenants. The tenants also strengthen our global customer network and provide further exposure to attractive growth sectors,” says Robert Wallace, CEO of the manager.
As at March 31, the new properties have a blended occupancy rate of 97.4% with a weighted average lease break of 7.6 years. Tenants include Hermes Germany, Gymshark, and Lounge Underwear.
Following the announcement of the acquisition on May 24, FLCT has concurrently announced the launch of a private placement to raise around $300 million via the issuance of 220 million new units at an issue price of between $1.363 and $1.399 per new unit. Net proceeds will be used to partially fund the proposed acquisition, with the remainder to be funded by borrowings.
The manager has appointed DBS Bank and Oversea-Chinese Banking Corporation as the joint lead managers and underwriters for the private placement.
Units in FLCT closed 1 cent or 0.69% lower at $1.44 on May 21 before trading was halted this morning.
