Singaporean investor Frasers Logistics & Commercial Trust (FLCT) is expanding its European portfolio with the acquisition of two logistics portfolios in Germany, the Netherlands and the UK for a total of S$548.7 mln (€340 mln).
In a first transaction, FLCT is buying three freehold logistics and industrial properties located in Germany and a logistics and industrial property in the Netherlands from subsidiaries of Frasers Property while the second purchase involves two freehold properties, known as Connexion and Blythe Valley Park, located in the UK from subsidiaries of I.M. Properties.
The purchase price represents a discount of 2.5% to the assets’ latest appraised value5 of S$562.4 mln.
The deal, which marks FLCT’s maiden entry into the UK logistics sector, is aimed at capitalising on strong logistics industry tailwinds, FLCT said. ‘The UK and Germany are the two largest e-commerce markets in Europe and among the top 10 globally,’ it said.
‘The new properties are complementary to FLCT’s portfolio and provides FLCT with a long-term income stream from a lineup of high-quality and diversified tenants,’ said Robert Wallace, Chief Executive Officer of the Manager. ‘Furthermore, FLCT’s maiden third-party acquisition of the properties in UK with a site available for development as a potential value-add opportunity showcases FLCT’s deal-sourcing capabilities to identify value for its unitholders.’
The portfolio has a long weighted average lease to break (WALB) of 7.6 years and a blended occupancy rate of 97.4%. With a total lettable area of 62,115 m2, the European assets are located within the key logistics hubs of Frankfurt and Mannheim in southwest Germany, and in the east of the Netherlands at the Food & Business Park Ede, which is close to key trading routes. The UK properties provide 61,213 m2 of lettable area and are located in West Midlands and within proximity to Birmingham.
