[SINGAPORE] Mainboard-listed Straits Trading announced a partnership with Cromwell Property Group on Tuesday (Nov 11) to grow its Australian industrial and logistics platform.
Under the deal, Cromwell will acquire a 19.9 per cent interest in the Australian industrial portfolio of Straits Real Estate (SRE), a wholly owned subsidiary of Straits Trading, for around A$47.6 million (S$40.4 million).
Two-step process
The partnership will be executed in two phases.
Phase 1, expected to complete by Dec 31, involves Cromwell acquiring the 19.9 per cent stake in the portfolio. As part of this phase, Cromwell will also fully acquire Terre Property Partners (TPP) – the entity that manages the portfolio assets.
According to a separate bourse filing, SRE currently holds a 40 per cent stake in TPP. The TPP team will be integrated into Cromwell’s platform.
Phase 2 will consist of a recapitalisation of the portfolio, which is expected to conclude in FY2026. Straits Trading noted that this phase is intended to “introduce new investors” to the portfolio.
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The seed portfolio, valued at a total of around A$470 million (S$399.3 million), comprises seven industrial assets located in key logistics hubs across the states of South Australia and Victoria.
The assets are leased to blue-chip tenants including Coca Cola Europacific Partners, Incitec Pivot and Wengfu.
Straits Trading, through SRE, will remain an investor in the portfolio.
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Straits Trading said the partnership allows it to “recycle capital at an opportune time” and redeploy proceeds into “potentially higher-return real estate opportunities”.
Based on pro-forma financials for the financial year ended Dec 31, 2024, the phase one transactions are expected to increase net tangible assets per share from S$3.057 to S$3.147.
Loss per share is expected to widen from S$0.016 to S$0.023.
The counter traded at S$1.65 as at 1.11 pm on Tuesday, up 0.6 per cent or S$0.01.
