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Soilbuild Business Space REIT has agreed to purchase an office building in Canberra’s CBD and a poultry processing factory in Adelaide for AU$55 million (S$55 million) and AU$61.25 million (S$61.25 million) respectively.
According to DBS Vickers analysts Carmen Tay and Derek Tan, the properties have a combined lettable area of 30,807.5 sq m, and these represent the Singapore-based group’s first overseas foray.
“The purchase consideration of AU$116.25 million is based on the aggregate valuation of AU$116.5 million by Colliers, which does not take into account outstanding incentives. Including acquisition and other transaction-related expenses, the total acquisition cost would be circa AU$120.96m.
“Initial NPI yield for the proposed acquisition stands at 6.42 percent, or 6.14 percent on a post-transaction cost basis,” they noted.
The analysts revealed that the properties have strong fundamentals as both are fully leased out, in addition to having long land tenures and a weighted average lease expiry (WALE) of 3.2 years.
In particular, the eight-storey office building in Mort Street has a lettable area of around 9,383.5 sq m. Although it sits on a leasehold site, the land parcel still has a remaining tenure of more than 60 years. It has an NPI yield of 6.31 years, or 5.9 percent, including total transaction cost and a WALE of 6.5 years, with rental increments of 3.75 percent per annum.
On the other hand, the poultry processing plant along Port Wakefield Road in Burton, Adelaide has a lettable area of about 21,424.3 sq m. The freehold property is supported by a long WALE of 16.1 years, initial NPI yield of 6.51 percent or 6.42 percent after completion of purchase, while yearly rental increases are benchmarked on the country’s Consumer Price Index.
The factory property is currently occupied by ASX-listed Inghams Group, a AU$1.4 billion company that sells chicken and turkey in Australia and New Zealand.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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