Singapore-listed Frasers Logistics & Industrial Trust has agreed to buy the smaller Frasers Commercial Trust in a S$1.54bn (€1bn) deal.
Frasers Logistics has 92 properties, valued at S$3.3bn – the bulk of which located in Australia, 25 in Germany and five in the Netherlands, while Frasers Commercial’s S$2.2bn portfolio is located in mostly in Singapore and Australia.
Robert Wallace, CEO of Frasers Logistics’s manager, said at a briefing today that the merged group would continue to focus on industrial, a sector which he described as “very much an important market”.
As part of the proposed merger, Frasers Logistics has agreed to acquire a 50% interest in the 46.5-hectare Farnborough Business Park in the UK from a subsidiary of Frasers Property for around £90.1m (€106m).
The remaining 50% interest in the business park is currently indirectly held by Frasers Commercial, which will fold its stake into the merged portfolio on completion of the proposed merger.
Wallace said the merger would enhance financial capacity and flexibility to enable the enlarged company to pursue acquisitions through its expanded mandate.
Frasers Logistics has first right of refusal on an acquisition pipeline worth in excess of S$5bn, he said.
Jack Lam, CEO of Frasers Commercial, said, “This merger will be transformational for both real estate investment trusts, allowing us to tap on each other’s strengths to create an even more resilient and diversified platform.