CWT, the global supply chain logistics solutions provider, says it is planning a sale and leaseback agreement of CWT Commodity Hub and CWT Cold Hub in connection with the listing of Cahe Logistics Trust (CLT).

Both logistics facilities, with a total value of $443 million, are part of CWT’s primary assets and close to PSA Terminals, major ports and central business district.

CWT says $65 million will be settled in the form of CLT units and the balance in cash. Given the current net book value of the properties, the disposal is expected to result in a one-off gain of $157.7 million.

The sales proceeds will be used to expand CWT’s logistics business and for early settlement of outstanding borrowings.

The setting up of CLT will be the first of its kind in Asia to capitalise on the positive outlook of the global logistics sector and the synergistic business models of CLT and CWT.

“CLT is also expected to leverage on the rights of first refusal granted by CWT and the strengths of CWT to pursue yield accretive acquisitions to achieve long term, regular and predictable distributable income for unitholders,” says CWT in an SGX statement.

The proposed trust holds an investment mandate that targets logistics properties in the Asia Pacific region, with an initial portfolio of six high quality logistics properties in Singapore, including CWT Commodity Hub and CWT Cold Hub.

“The creation of CLT to invest in yield-accretive logistics properties in Asia is a historic milestone and enables CWT to own a capital-efficient asset-owning vehicle to complement our core logistics business operations as well as enhance the Group’s ability to expand its business regionally and globally,” said Loi Pok Yen, Group CEO of CWT. “In addition, the sale and leaseback will enable the Group to participate in CLT through its holdings of CLT units and derive a stable income stream from CLT's distributions.”