ESR-Reit to acquire five Melbourne logistics assets from Frasers Property for A$276.8 mil
The 4.3% pro-forma DPU accretion and 90% portfolio occupancy could strengthen investor confidence in capital recycling toward income-producing overseas logistics assets.
ESR-Reit proposes acquiring five freehold Melbourne logistics properties for A$276.8 million, 1.9% below valuation, with completion expected in 3Q2026.
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ESR-Reit is proposing to buy five freehold logistics properties in Melbourne, Australia from Frasers Property at a net purchase consideration of A$276.8 million ($247.9 million).
The price represents a 1.9% discount to the market valuation of the properties. The acquisitions are expected to be 4.3% DPU (distribution per unit) accretive on a pro-forma basis, added the reit’s manager in a July 7 release.
The purchase will be funded using a combination of debt and proceeds from ESR-Reit’s recent divestments.
Read also: Coliwoo buys hotel strata lot at ESR BizPark @ Changi for $101 mil
In June, the Reit completed the sale of eight industrial properties in Singapore to third-party purchasers managed by Brookfield Asset Management affiliates for $338.1 million. The Reit also divested a hotel strata lot at ESR BizPark @ Changi to Coliwoo for $101 million earlier this year.
The Melbourne logistic assets being purchased are located at 15 & 33 Archer Road, Truganina; 4 to 12 Doriemus Drive, Truganina; 64 West Park Drive, Derrimut; 39 Naxos Way, Keysborough; and 48 to 76 Naxos & 68 Atlantic Drive, Keysborough.
The assets have a total gross lettable area of around 1.3 million sq ft, with an overall occupancy of 90%. Tenants include global supply chain company CEVA Logistics, Australian firm Silk Logistics, and furniture retailer Nick Scali. The portfolio has a weighted average lease expiry of 3.2 years.
According to ESR-Reit, the acquisition is in line with its “Total Return Strategy” that aims to drive long-term unitholder return through active portfolio management, organic growth via redevelopments, asset enhancement initiatives and value-accretive acquisitions.
In a bourse filing, Frasers Property said the divestment will enable the group “to unlock value from its assets and optimise capital productivity”. It is not expected to have any material effect on the group’s net asset value per share and the earnings per share for the current financial year.
Completion of the deal is estimated to be in 3Q2026 following approval from Australia’s Foreign Investment Review Board, according to ESR-Reit.
Read also: ESR-REIT to divest eight industrial assets to Brookfield Asset Management for $338.1 mil