TRANSPORT & LOGISTICS | Staff Reporter, Singapore

Cache buys nine Australian warehouses for $188.3m

They have an average lease expiry of five years and a 98.1% occupancy.

Cache Logistics Trust (Cache) bought a portfolio of nine warehouses in Australia for $188.3m (A$177.6m).

OCBC Investment Research noted that these freehold logistics assets have a weighted average lease expiry (WALE) of five years and a strong occupancy of 98.1%.

Singapore Business Review previously reported that the initial estimate of the portfolio's price is at $205m (A$200m). There were also 10 properties expected to be bought by Cache.

In terms of organic growth, the portfolio has an in-built rental escalation of between 2.0% and 3.5%, OCBC noted.

The initial net property yield has been raised to 6.4%, which is above the 5.5% rate offered by the $100m perpetual securities issue on 25 January 2018.

Legal completion of the deal is expected by to end by February 2018.

OCBC analyst Deborah Ong said aggregate leverage will increase from 36.3% to 39.3% post-acquisition.

"On a pro forma basis, FY17 distribution per unit (DPU) would have increased by 1% to 6.822 cents. We are positive on the acquisition, given the improved profile of the portfolio," she added. 

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