Singapore-listed industrial real estate investment trust AIMS APAC REIT (AA REIT) is acquiring Boardriders APAC HQ, a light industrial facility located in Queensland, Australia, from GSM Rocket Australia for A$38.46 million ($27 million), according to a stock exchange filing Wednesday.
Located in the Gold Coast suburb of Burleigh Heads, the property is situated on a 3.33-hectare freehold site with a purpose-built warehouse, an office building and a two-storey retail building.
Following the acquisition, the property will be leased to GSM (Operations) Pty Ltd for 12 years on a triple net lease basis, according to the disclosure. GSM (Operations) and GSM Rocket Australia are wholly owned subsidiaries of Boardriders Inc, the company that owns global brands such as Billabong, Quicksilver, Roxy and DC Shoes.
“The proposed acquisition represents an opportunity to further diversify and strengthen our portfolio with a strategic addition that offers a strong tenant profile,” said AA REIT CEO Koh Wee Lih.
AA REIT said the acquisition is expected to be predominantly funded by Australian dollar debt facilities in order to maintain a natural currency hedge on the acquisition.
The Singapore trust’s aggregate leverage following the acquisition will increase from 33.7 per cent as on March 31, 2019, to 35.5 per cent on a proforma basis, assuming the acquisition is fully funded by debt.
The acquisition will be AA REIT’s maiden foray into Queensland, Australia, and its second property investment in the country.
The outlook for the Gold Coast economy remains positive as the region is currently experiencing growth across key economic factors, including strong population growth, investment into major infrastructure developments, and an increase in both domestic and offshore tourism into the region, AA REIT said.
“This investment will enable AA REIT to expand its footprint in a market that offers solid long-term growth,” it added.
AA REIT’s existing portfolio consists of 26 industrial properties, 25 of which are located throughout Singapore and a 49 per cent interest in one business park property, Optus Centre, which is located in Macquarie Park, New South Wales, Australia. Its portfolio had a total value of S$1.46 billion ($1.1 billion) as on March 31, 2019.
The acquisition marks the first investment after AIMS Financial Group became the sole owner of the management entities of AA REIT in March 2019. The group is also a strategic investor in the Sydney Stock Exchange.