SINGAPORE (Nov 25): AIMS APAC REIT (AA REIT) and its joint venture partner have secured a new 12-year agreement for the Optus Centre with existing master tenant Optus Administration.
Optus Administration is a wholly-owned unit of Singtel Optus, the second largest telco in Australia and a subsidiary of Singapore Telecommunications.
One of the largest business parks in Australia, the Optus Centre is located at Macquarie Park in a suburb in northern Sydney, New South Wales.
The campus comprises six buildings with a total net lettable area of 84,194 sq m, on a land area of 75,860 sq m.
AA REIT owns 49% of the centre while JV partner Stockland owns the remaining 51%.
Based on the centre's valuation of A$570 million ($528 million), AA REIT's 49% share in the asset is A$279.3 million.
This represents a 51.4% increase compared to the REIT's purchase price of A$184.4 million back in 2014.
The new lease will start from July 1, 2021, following the completion of an asset enhancement initiative (AEI).
Upon the start of the new lease, Optus will continue to occupy the entire net lettable area of the campus for a period of 12 years.
The deal includes an annual rental escalation of 3.25% on the face rent, and two options to extend the lease for a further five years per option after the initial lease term, says AA REIT.
The property will provide AA REIT with an estimated net property income of A$28.3 million in the first year.
Over the 12-year lease term, the property will provide an average net property income of A$36.5 million, after taking into account rental escalation.
As at Sept 30, Optus Centre represented 14.7% of AA REIT's total portfolio valuation and accounted for 6.4% of the portfolio's net lettable area.
Optus is AA REIT's largest tenant, contributing 12.3% of gross rental income for the quarter ended September.
As at 3.15pm, units in AA REIT are down 2 cents at $1.42.
