GPT grows Logistics to $4.1b by Ascot portfolio acquisition

18 October 2021

GPT Group has secured a 24-asset portfolio offered up to the market by Ascot Capital in a deal worth $681.7m.

The portfolio of 23 industrial & logistics assets and 1 office asset was put to the market via Morgan Stanley’s Tim Church and CBRE’s Chris O’Brien.

The price is reported to represent an overall yield across the portfolio of about 4.3%.

GPT’s Chief Executive Officer, Bob Johnston, said, “The Ascot portfolio with a 9 year WALE and strong tenant covenants is a great addition to GPT’s existing $3.5 billion Logistics portfolio, and is in line with our strategy to continue to grow our exposure to the Logistics sector through developments and acquisitions. The acquisition will increase GPT’s investment portfolio weighting to the Logistics sector to 26%, progressing us closer toward our medium- term target of approximately 30%. Growth in the sector will also be realised through GPT’s Logistics development pipeline, with an expected end value of approximately $1.4 billion.”

The acquired portfolio is 75% weighted to eastern seaboard states and the ACT.

The 23 Logistics assets acquired, totalling 161,700 square metres (sqm) of gross lettable area, are located across Australia, and are fully leased with a weighted average lease expiry (WALE) at 30 September 2021 of 9.8 years.

The 6-level 10,200 sqm Office asset acquired is well located in the Canberra CBD, with a WALE of 4.7 years at 30 September 2021.

Settlement of the transaction is expected in November 2021.

Approximately 70% of the acquired portfolio by income is leased to Government, ASX listed or multinational entities which is in line with GPT’s existing portfolio. Three Office assets and one Logistics asset from the original portfolio being marketed for sale by Ascot Capital were not acquired by GPT.

Mr Johnston added: “Strong levels of take up for prime Logistics space has resulted in low vacancy rates in the sector and demand is expected to continue to be underpinned by growing investment in supply chain infrastructure. The Ascot portfolio acquisition will increase our Logistics portfolio to $4.1 billion and reaffirms GPT’s significant position in the Australian Logistics market.”

The debt funded transaction will take gearing to 27.9% (pro forma 30 June 2021), remaining below the mid-point of GPT’s target gearing range of 25% to 35%. The transaction has an initial yield of approximately 4.3% and is accretive to Funds From Operations in year one.