SINGAPORE (July 1): Suntec REIT is adding a Sydney freehold Grade A office building to its portfolio for A$297 million ($282 million), bringing assets under management in Australia by the REIT to approximately 14%.
Manager ARA Trust Management (Suntec), says Suntec REIT, through its wholly-owned sub trust, Suntec REIT 21 Trust, has entered into agreements to acquire 100% interest in the property located at 21 Harris Street, Pyrmont.
Currently still under development, 21 Harris Street is designed to be a campus style, nine-storey Grade A office building with ancillary café, childcare, gymnasium, basement carpark and end-of-trip facility
The freehold property has a net lettable area (NLA) of 203,400 sf comprising 181,900 sf of office space and 21,500 sf of retail space.
Pre-committed occupancy stands at 91.2%, nine months ahead of practical completion expected in 1Q20.
The property will be anchored by Publicis Groupe, a global communications and marketing company as their Sydney headquarter.
The remaining precommitted spaces has been leased to Campfire, an international co-working operator, as 01 July 2019 well as a childcare centre and a gym operator. In addition, the developer will provide a rent guarantee on the unlet office space for three years post practical completion.
The acquisition will be funded by Australian dollar bank borrowings to provide a natural currency hedge and equity.
Chong Kee Hiong, CEO of the manager, says, “Following the completion of this acquisition, approximately 14% of Suntec REIT’s assets under management will be in Australia... The accretive acquisition will improve earnings and distributions to unitholders with an initial net property income yield of 5.5% upon practical completion.”
Pyrmont is an inner-city fringe area 2km west of Sydney’s Central Business District (CBD). The precinct has evolved into Sydney’s technology media and entertainment hub, with Google, Fairfax Media, The Star Entertainment Group, Thomson Reuters, Paramount Pictures and Village Roadshow within a 500m radius from the property.
As at 9.47am, units in Suntec REIT are trading 1 cent lower at $1.93.
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