ESR-REIT (J91U) said on Jul, 07 2026 that it has signed separate sale-and-purchase agreements to buy five freehold logistics properties in Melbourne for a net purchase consideration of about 247.9 million Singapore dollars.

The assets, located in the western and south-eastern industrial precincts of Melbourne, have a combined gross lettable area of roughly 122,411 sq m, an average building age of 11 years, occupancy of 90 per cent and a weighted average lease expiry of 3.2 years.

The agreed purchase price of 258.4 million Singapore dollars will be reduced by an estimated 10.5 million Singapore dollars at completion to reflect unutilised rent incentives and a one-year rental guarantee for a partially vacant property at 39 Naxos Way, Keysborough.

Including stamp duty, professional fees and a 2.6 million Singapore-dollar acquisition fee payable to the manager, the total acquisition outlay is estimated at 271.3 million Singapore dollars. ESR-REIT intends to fund the deal with proceeds from recent asset divestments and debt financing, and may later issue up to 175 million Singapore dollars of subordinated perpetual securities to pare down debt.

The purchase price represents discounts of 2.4 per cent and 1.9 per cent to the independent valuations of the portfolio with and without the rental guarantee, respectively. The first-year net property income yield is projected at 5.5 per cent.

On a pro-forma basis for FY2025, the transaction is expected to lift distribution per unit by about 4.3 per cent and bring aggregate leverage to 41.9 per cent, or 38.5 per cent if the planned perpetual securities are issued. Completion is targeted for the third quarter of 2026, subject to Australian Foreign Investment Review Board approval.