Singapore’s FLCT Acquires Four Logistics Properties in Germany

Singapore’s Frasers Logistics & Commercial Asset Management Pte. Ltd, manager of Frasers Logistics & Commercial Trust (FLCT) signed a share purchase agreement with subsidiaries of Frasers Property Limited to acquire 89.9% of the equity interests in the property-owning companies which hold four logistics properties located in Germany.

The purchase consideration will be funded through external debt financing and the proposed acquisition is expected to be completed by end of this month.

The agreed property purchase price for the new properties is $141.26 million, representing a discount of 5.3% and 1.1% to the appraised value of these properties Colliers and CBRE respectively, FLCT said on Friday.

Germany’s freight and logistics market is one of the largest in Europe and remains attractive for its strategic location within the region. It has maintained its resilience due to its strong underlying market fundamentals, bolstered by close to record low vacancy rates, slowdown in new developments resulting in limited supply in key logistics hotspots which drove market rents by 12% in 2023.

As at 31 December 2023, these properties comprise four buildings with a total gross leasable area (GLA) of approximately 72,422 sq m. The buildings are fully leased to quality tenants which include multinational corporations such as Schenker AG, DACHSER GmbH & Co. KG and Hermes Germany GmbH, which are existing tenants within FLCT’s portfolio.

These are also key third-party logistics providers with exposure to the new economy sectors such as e-commerce fulfilment services. Other tenants, namely, Posagenda GmbH and TB International GmbH, are in the logistics, distribution, and consumer and retail product sectors.

The three freehold assets – Egelsbach Property, Saarwellingen Property and Überherrn Property – are strategically located within the “Blue Banana” region which denotes the European regions with dense urban population of over 110 million and represents the corridors of Europe, passing through its two largest ports (in Belgium and the Netherlands), across the Rhine region in Germany to northern Italy.

The Egelsbach Property is located close to FLCT’s existing assets within the Frankfurt logistics cluster. The leasehold asset, being the Hamburg Property, is situated in proximity to the Port of Hamburg, the largest port in Germany. This enlarged footprint further deepens FLCT’s L&I presence in its existing core market.

Improves Efficiency                           

Anthea Lee, CEO of the REIT Manager, said that this transaction allows FLCT to acquire a 100% L&I portfolio in a sector which has demonstrated secular growth and driven by market trends which include the prioritisation of supply chain resilience and the use of technology to improve the efficiency of logistics operations.

“The proposed acquisition is in line with our strategy as we increase the proportion of L&I assets in our portfolio. This is also aligned with our objectives of providing sustainable growth for FLCT unitholders, and we will continue to focus on identifying suitable investment opportunities to drive further growth,” she added.

FLCT has a portfolio comprising 107 industrial and commercial properties, worth approximately $6.7 billion and diversified across five major developed markets – Australia, Germany, the UK, Singapore and the Netherlands.