The JF US Industrial Trust is strengthening its United States portfolio with the purchase of 35 properties for $US260.8 million on a yield of 8.1%.
The properties are located in and around the greater Chicago Region and in Grand Rapids, Michigan.
The 35 properties portfolio has 5.4 million sq ft of lettable area and is currently 93% occupied with a weighted average lease term of 4.1 years.
The properties have been purchase through the CenterPoint James Fielding joint venture, in which JUI has a 95% interest. The new portfolio is being acquired from CenterPoint Properties Trust or third party vendors.
By acquiring the new portfolio, the CenterPoint James Fielding JV fulfils its first year obligations under the ROFO Agreement which ensures that the ROFO Agreement will continue to be available until at least February 2008.
Following the purchase, JUI will increase its portfolio size to 76 assets and reduce the exposure to any single asset by value from 9.4% to 5.8%.
The new portfolio will diversify the trust’s tenant base and rental income streams by adding 55 additional tenants.
JUI’s trust manager Ben Hindmarsh said the portfolio includes 31 assets directly acquired from Centerpoint and four assets from third party vendors.
“The new portfolio is overall of a higher quality than the existing portfolio and is well positioned to capitalise on the strengthening US industrial markets,” Hindmarsh said.
He added that the new portfolio improves the organic rental growth in the portfolio via fixed rental increases and provides the trust with strong underlying rental growth.
The acquisition will be partly funded by borrowings and an entitlement offer.
JUI has sought to raise $128.5 million through an entitlement offer.
J.P. Morgan Australia Limited has underwritten the Entitlement Offer and will also act as joint lead manager along with BG Capital Corporation Limited.
By Nelson Yap