Mapletree’s logistics real estate investment trust (REIT) has bought its first Australian asset from a joint venture between Goodman and Brickworks.
Goodman Australia Industrial Fund said the Coles Chilled Distribution Centre in Eastern Creek, New South Wales will be sold for AUD253m (€174m) to the Mapletree Logistics Trust, which was established as Singapore’s first Asia-focused logistics REIT in 2005.
Ng Kiat, chief executive of Mapletree Logistics Trust, said the deal is a “springboard for further expansion into Australia, which could potentially become a new core market for MLT, adding geographic and income diversification” to its portfolio.
The acquisition marks MLT’s maiden entry into Australian logistics. MLT’s portfolio was diversified across seven countries in Asia, ratings agency Moody’s said in a note. The REIT’s largest presence by property value was in Singapore (37.8%), Hong Kong (22.2%) and Japan (20.5%).
“We expect MLT will immediately benefit from the recurring cash flow from this fully-tenanted asset once the transaction is completed,” said Moody’s associate analyst, Rachel Chua.
“Moreover, the long lease tenure with a good quality tenant provides further stability to its cash flow and income stream.”
Kiat said the 55,395 sqm asset allows MLT to increase the pace it rejuvenates its portfolio, by “recycling capital released from selective divestments of older, low yielding assets, into acquisitions of better quality, higher yielding assets”.
“Its exceptionally long lease tenure of 19 years with built-in annual rent increments from a lessee of strong credit standing provides long-term cash flow certainty,” Kiat said. “It also diversifies our tenant base with the addition of a blue-chip tenant.”
The asset, purpose-built in 2007, was extended by 12,325 sqm in July last year. Coles has a 20-year lease until 2034.
Jason Little, general manager of Australia for Goodman, said the sale is part of the firm’s strategy of “selectively rotating assets within its portfolio and recycling capital into new high quality properties”.
