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The freehold Grade A North Sydney office has an approximate net lettable area of around 150,694.7 sq ft.
Keppel REIT is acquiring a freehold Grade A office building in North Sydney, Australia for A$327.7 million (S$322.2 million).
It is purchasing the property, Blue & William, from a joint venture between Australian developer Thirdi and Hong Kong’s Phoenix Property Investors at a per sq ft (psf) price of A$2,174, based on the building’s approximate net lettable area of around 150,694.7 sq ft, reported Mingtiandi.
The trust is tackling this new project with Sydney-based developer Lendlease, which agreed to be project developer and manager.
At A$342.9 million, the new building’s estimated total project cost will include the development consideration, the A$3.3 million acquisition fee payable to the manager and the A$11.9 million transaction costs, including stamp duty and applicable taxes.
The latest acquisition will bring the total value of the REIT’s assets under management to S$9 billion from S$8.6 billion.
“In line with our active portfolio optimisation strategy, this DPU-accretive investment brings an initial net property income yield of 4.5%, which will enhance Keppel REIT’s overall portfolio returns,” said Shirley Ng, Deputy CEO and Head of Investment of the REIT’s manager.
Thirdi and Phoenix Property Investors broke ground on the 10-storey office building in April. Occupying a 24,853.8 sq ft site, the freehold property is located at the intersection of 2-4 Blue Street and 1-5 William Street.
Set to be completed in mid-2023, Blue & William is about 350 m to the Victoria Cross Metro Station, which will connect the area with the Barangaroo commercial hub and the city’s Central Business District (CBD).
The REIT’s manager noted that the developer will provide a three-year rental guarantee on any unlet space following practical completion.
“The investment will be fully funded with Australian dollar-denominated loans for natural hedge, with progressive payments to be made based on construction milestones,” it said.
Keppel REIT’s aggregate leverage would stand at around 39.9% post-acquisition.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.