As agreed, Dexus will acquire a 66.7% stake in the entities that own a 76-year ground lease at Jandakot Airport (JAD). ADI will hold the remaining 33.3% interest.
Located around 25km south-west of Perth Airport (PER) and 20km south of Perth CBD, Jandakot Airport is the major general aviation airport in WA. It started operations in 1963 and currently encompasses an area of around 620ha.
The airport mainly serves air work aviation rather than passenger transportation. Jandakot Airport is also the largest aviation training base in Australia.
Besides acquiring the airport, Dexus and ADI will spend an additional $145m (A$200m) to acquire other industrial properties.
The overall investment is part of Dexus’ plan to invest in sustainable income streams as it seeks to diversify the funds management business.
Dexus CEO Darren Steinberg said: “These are high-quality investments that will further enhance the resilience of our property portfolio.
“The near term development potential and scope to enhance returns by introducing third party capital make this a compelling opportunity, and one aligned with our priorities to grow our funds management business and recycle capital into high returning opportunities.”
ADI will raise around $253.9m (A$350m) through equity financing to partially fund its share of acquisitions. Dexus plans to take up its full $29.03m (A$40m) entitlement under ADI’s Entitlement Offer.
Meanwhile, Dexus will fund the transactions through debt facilities.
In a statement, Dexus said that the transactions are expected to be accretive to its adjusted funds from operations per security for the fiscal year 2022.