ARA Logos Logistics Trust (ALOG) is proposing to buy five logistics facilities in Australia from Logos Property Group and to invest in two Logos-managed funds, involving a total commitment of S$404m (€247m).
The Singapore-listed company, previously known as Cache Logistics Trust, plans to buy the Logos assets in Brisbane, including one due for completion in November 2021, for S$226m.
The trust will also take a 49.5% stake in what is known as the New LAIVS Trust, and a 40% interest in Oxford Property Fund, for a total of S$179m. The combined portfolio held by the two funds is worth almost A$800m.
Their portfolios include a Woolworths distribution centre in western Sydney, which Logos acquired last year for A$161m, and Oxford Cold Storage, valued at A$332m.
As part of its plan to undertake equity raising to fund the acquisition, ALOG will issue new units in the trust to Ivanhoé Cambridge China, which is wholly-owned by Ivanhoé Cambridge.
ALOG will also issue new units to Logos, which is not majority-controlled by ARA. There will also be a private placement of new ALOG units to institutional and other investors.
Karen Lee, CEO of ALOG’s manager, said the acquisitions would transform the trust, giving it an expanded footprint across key economic hubs on Australia’s east coast.
The acquisitions, Lee said, would be the first since Cache Industrial Trust was rebranded ALOG in April this year, and were in line with ALOG’s strategy to rebalance its portfolio.
Post-acquisition, the value of ALOG’s portfolio would increase by 28.2%, from approximately S$1.3bn to S$1.7bn, with its weighting to Australia increasing in tandem from 32.5% to 47.6%.
Lee said the investment would strengthen ALOG’s portfolio and provide further income and geographic diversification.
The transaction would also provide “visibility of a future growth pipeline”, which included pre-emptive rights over the balances of 50.5% and 60% in the New LAIVS Fund and Oxford Property Fund, respectively, the REIT manager said.
Lee said the Australian industrial and logistics market, especially the eastern seaboard cities, continued to be highly sought after by investors, due to strong market fundamentals, limited supply and favourable demographics.
The ALOG acquisitions will be subject to unitholders’ approval at an extraordinary general meeting.