The weighted average lease expiry across the Truganina portfolio was 6.6 years. Tenants include automotive lighting group Stedi, Goodride Tyres and building products supplier Stoddart Group.
The acquisition follows a flood of institutional capital from Singapore into Australian office, industrial and hotel assets over the past 12 months.
Last week, another real estate conglomerate, CapitaLand, acquired a major Melbourne office tower – 120 Spencer Street – for $320 million while in May Hong Kong-based investment manager Baring Private Equity Asia secured the Hilton Sydney for around $530 million, in the biggest single hotel deal in Australian history.
Also highly active has been Singapore’s sovereign wealth fund GIC, which in April acquired a half-share in listed Singaporean developer Wee Hur’s Australian student housing portfolio for $568 million.
Explaining the rationale for the acquisition, FLCT’s manager, Frasers Logistics & Commercial Asset Management, said that due to high demand for warehouse space in Melbourne’s west, the vacancy rate in the precinct had fallen below 1 per cent while rents were up 15 per cent in the past 12 months.
Despite this surge in rents, the REIT manager said that in comparison to the other eastern seaboard cities of Sydney and Brisbane, Melbourne’s west “continues to provide an attractive rental affordability proposition”.
Chief executive Robert Wallace said the Truganina properties’ smaller tenancy sizes provided an offering that targets a differentiated tenancy base, making them a “complementary fit” to FLCT’s existing industrial portfolio.
Being newly built, the properties require little near-term capital expenditure, the trust’s manager said, and have sustainability features including about 300 kilowatts of solar photovoltaic panels.