SINGAPORE: Frasers Logistics & Commercial Trust (FLCT) will acquire an 89.9% stake in four logistics properties, expanding its footprint in Germany.
The property purchase, worth EUR129.5 million (S$188.9 million), brings substantial assets into FLCT’s portfolio, enhancing its position in the logistics and industrial (L&I) sector.
According to The Edge Singapore, on March 14, FLT Europe B.V., a wholly-owned subsidiary of FLCT’s trustee, inked a conditional share purchase agreement (SPA) with Frasers Property Limited (FPL) subsidiaries Frasers Property Investments (Europe) B.V. and FPE Investments RE11 B.V.
Frasers Property Investments (Europe) (FPIE) currently owns a majority stake of 94.9% in three property-holding firms, while FPE Investments holds a comparable 94.0% stake in the fourth company.
FPIE will maintain a 5.0% interest following the acquisition, and FPE Investments will retain a 4.1% interest in these companies.
The properties have a total gross lettable area of 72,422 square metres. They are fully leased to multinational corporations such as Schenker AG, DACHSER GmbH & Co. KG, and Hermes Germany GmbH.
These companies, along with others like Posagenda GmbH and TB International GmbH, represent diverse sectors, including e-commerce fulfilment services, logistics, distribution, and consumer products.
Located strategically in key logistics markets across Germany, three properties sit within the “Blue Banana” region, stretching from North West England to Northern Italy. Additionally, one property is situated near the Port of Hamburg, Germany’s largest port, enhancing its logistical significance.
The REIT noted that the German logistics sector maintains resilience due to strong market fundamentals, including record-low vacancy rates and limited new developments, leading to a 12% increase in market rents in 2023.
CEO of the REIT Manager, Anthea Lee, highlighted the strategic importance of this acquisition. She stated:
“This transaction allows FLCT to acquire a 100% logistics and industrial (L&I) portfolio in a sector which has demonstrated secular growth and driven by market trends which include the prioritisation of supply chain resilience and the use of technology to improve the efficiency of logistics operations.”
In addition, this acquisition grew FLCT’s portfolio occupancy to 95.9% as of Dec 31, 2023, while maintaining full occupancy for its L&I portfolio.
The portfolio’s weighted average lease expiry (WALE) is 4.4 years based on gross rental income (GRI).
To finance the purchase, FLCT plans to utilise external debt financing. The transaction is on track for completion by the end of March. /TISG
Read also: Frasers Property subsidiary to redeem S$600 million perpetual securities
