Frasers Acquire Mount Waverley asset for $60m

Frasers Logistics & Commercial Asset Management will acquire a fully leased freehold suburban commercial property in Mount Waverley, Victoria, Australia for $60.25 million.

The property is strategically located at 545 Blackburn Road, Mount Waverley, one of the highest concentration of employment precincts outside of the Melbourne’s CBD.

The five-storey A Grade suburban office building has a total net lettable area of 7,297 sqm comprising two retail tenancies on the ground level and four upper levels of office space. The property has 335 car parks and had a NABERS energy rating of 4.5 stars.

The property is 100% leased to nine tenants including NYSE and ASX listed tenants General Mills Australia, Bank of Melbourne and ECI Software Solutions and offers a weighted average lease expiry of approximately 5.0 years as at 31 March 2022. The property generates approximately $2,995,785 in net income each year, providing the purchaser a 5.0% passing yield on their acquisition.

Mr. Robert Wallace, Chief Executive Officer of the REIT Manager, said, “The acquisition is aligned with our strategy to pursue strategic opportunities which provides attractive yields and enables us to leverage our management expertise in Australia. With the Property being 100% leased to reputable tenants in diverse industries, the Acquisition is expected to further enhance FLCT’s quality tenant mix and portfolio metrics, while providing unitholders with a stable income stream.”

The acquisition is expected to complete on 20 May 2022.

According to JLL Research, the Melbourne south-eastern office market recorded a positive net absorption of 14,221 sqm in 2021, which continued into the first quarter of 2022 with a positive net absorption of 1,684 sqm, backed by positive relocation activity from large tenants. Occupier demand is expected to be positive with recovery post-COVID-19 in the Melbourne south-eastern office market.

Frasers are of the view that good quality buildings such as this will continue to be the preferred products in this market as flight to quality opportunities arise.

The property will be Frasers Logistics & Commercial fourth commercial asset in Australia, increasing the Trusts exposure to the Australian market to 51.8% of its total portfolio value, from 51.3% prior to the acquisition. Post-acquisition, based on the portfolio metrics as at 31 March 2022, the Trusts portfolio occupancy rate will increase to 96.2% from 96.1% with a WALE at 4.6 years.

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