Frasers Logistics divests 50% stake in Queensland property for $93m

99 Sandstone Place, Parkinson, Queensland, Australia (Source: Frasers Property Australia)

Singapore-listed Frasers Logistics & Industrial Trust (FLT) has sold 50 per cent stake in a cold storage distribution facility in Queensland for A$134.20 million ($92.69 million).

Frasers entered into a sale and purchase agreement with an entity affiliated with DWS Investment Australia Ltd (DWS) to divest the property.

The sale represents an 8.8 premium over the book value of A$123.30 million (based on FLT’s 50 per cent stake) as at March 31, 2019, and a 15.3 per cent premium over the original purchase price of A$116.40 million. The latest valuation of the property was A$134.20 million (based on FLT’s 50 per cent stake) as at May 01, 2019.

The Queensland property’s single largest tenant is local supermarket operator, Coles, which contributes to 7 per cent of gross rental income (GRI). This is expected to be reduced to 3.6 per cent post-divestment of FLT’s 50 per cent ownership stake.

According to FLT, the divestment is in line with its active management strategy and the proceeds will provide it with greater financial flexibility. It also provides a strategic opportunity for FLT is minimise its portfolio’s tenant concentration risks.

The estimated net proceeds work out to be approximately A$128.80 million post-divestment of FLT’s 50 per cent stake in the Queensland property.