Cache Logistic Trust entered into a sales and purchase agreement with Wacol Industrial Property Trust to acquire a A$27m freehold warehouse in Australia, marking its fourth industrial property there after making its foray earlier this year.
The latest addition is a single-storey warehouse with two levels of corporate office, built on a 22,440sqm land and has a gross lettable area around 13,363sqm.
The property is located at Wacol, Queensland, Australia, approximately 18km west of Brisbane CBD with close proximity to major motorways.
Cache expects the acquisition to help improve income diversification and provide steady income growth as existing tenant, Western Star Trucks Australia signed a lease agreement that allows for fixed annual rental escalation of 4% until Aug 2023.
As at Oct ‘15, the warehouse has a weighted-average-lease-to-expiry (WALE) of 7.9 years, which could extend the REIT’s WALE to 4.6 years from 4.5 years as at Jun ‘15.
Cache plans to fully finance the acquisition via bank borrowings, which will elevate its aggregate leverage to 39.4% from 38.0% in 1H15.
Cache Logistic Trust currently trades at 1.06x P/B and has a distribution yield of 8.3%. The street has 5 Buy and 5 Hold ratings with a consensus TP of $1.14 on the logistics REIT.
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