Frasers Logistics & Industrial Trust expects $17.7m gain from sale of warehouse-office property

It sold the property for $90.5m to The Trust Company (Australia) Limited.

Frasers Logistics & Industrial Trust (FLT) sold 80 Hartley Street, Smeaton Grange, New South Wales for $90.5m (A$90.5m) to The Trust Company (Australia) Limited. The price was 39.2% higher than the original price paid by FLT at A$65m when it was bought in 2016.

FLT expects to recognise a net gain of $17.7m (A$17.7m) over the book value of the property. “The proposed divestment is in line with the REIT Manager’s proactive asset management and portfolio rebalancing strategies,” it said.

The property comprises a cross-dock, regional distribution facility with a high clearance warehouse, office accommodation of 2,033 sqm, drive-around truck access, 104 access doors, and 436 car parking spaces. It occupies a site of 167,100 sqm and has a total gross lettable area of 61,281 sqm.

It was purpose-built for Coles Supermarkets Australia Pty Ltd and will have a remaining lease term of approximately five years, upon extension of the existing lease.

FLT CEO Robert Wallace said, “The estimated net proceeds from the sale will provide FLT with greater financial flexibility, as we continue to pursue value enhancement opportunities.”

Following the proposed divestment, FLT’s portfolio will comprise 60 properties in Australia, 17 in Germany. and four in the Netherlands, with a total value of approximately $2.8b (A$2.8b).

The estimated net proceeds from the proposed divestment is approximately $82.2m (A$82.2m), after taking into account the divestment fee to be paid to the REIT Manager, outstanding lessor obligations, taxes and other divestment related expenses.

The net divestment proceeds may be distributed to FLT unitholders and/or used for funding potential acquisition opportunities, reducing existing debt, and/or other general corporate purposes, the company said.