Frasers Logistics & Industrial Trust - Exercise of call option to acquire Martin Brower property
- Frasers Logistics & Industrial Trust (FLT) recently announced that it had exercised its call option to acquire the Martin Brower property which is located in Sydney, New South Wales, from its sponsor. The total purchase consideration is ~A$58.2m and the property is fully leased to Martin-Brower Australia Pty Ltd for a term of 20 years.
- Following this acquisition, FLT’s portfolio will comprise 54 properties with a total GLA of ~1.2m. Its WALE will be lengthened from 6.6 years to 7.0 years and portfolio occupancy will inch up slightly from 99.2% to 99.3%. With this acquisition, FLT’s aggregate leverage will remain low at 29.8% (versus 28.2% as at 30 Sep 2016).
- On a pro forma basis, FLT’s DPU for 1QFY16 would increase from 1.41 S cents to 1.44 S cents after this purchase.
- We had previously factored in the acquisition of this call option property in our model and hence reiterate our BUY rating and S$1.10 fair value estimate on FLT.
- The stock offers investors an attractive FY17F distribution yield of 7.3%.