CFA Society Singapore
SINGAPORE (Mar 20): ARA Trust Management, the manager of Cache Logistics Trust, announced that it has acquired a warehouse and office facility located in Melbourne, Australia for a total consideration of A$44.3 million ($42.6 million), with an initial property yield of 6.8%.
This acquisition was made through Cache Logistic Trust’s wholly-owned sub-trust Altonia (VIC) Trust.
Located within the industrial suburb of Altona, the freehold property’s land area is about 83,020 sqm and its net lettable area is about 37,853 sqm.
It is currently 76% occupied by a single anchor tenant under a three-year lease with an option to renew a further term of three years. The weighted average to lease to expiry is 2.53 years.
Under the sale and purchase agreement, the vendor will provide a two-year rental guarantee for the balance 24% vacant area.
Upon completion of the acquisition, which is expected to be by end-Mar, the aggregate leverage of Cache Logistics Trust will be 36.9%, while asset under management (AUM) in Australia would constitute about 30.8% of total AUM.
The acquisition is in line with the manager’s portfolio rebalancing and growth strategy where it seeks to proactively recycle capital through strategic divestments and disciplined acquisitions of assets that contribute to sustainable long-term earnings and asset values.
The manager intends to fund this acquisition using net sales proceeds of about $16.0 million from the divestment of Jinshan Chemical Warehouse and internal sources of debt financing.
Daniel Cerf, CEO of the manager says, “Cache has made enormous strides in our expansion since our first entry into Australia in 2015. This Acquisition marks another milestone in our portfolio rebalancing strategy where we look to acquire higher-performing freehold assets. Furthermore, we are facilitating the funding of the transaction by way of recycling capital from our recent divestment of Jinshan Chemical Warehouse which closed in December 2018.”
Units in Cache Logistics Trust closed at 72 cents on Wednesday.