A joint venture between AIMS APAC REIT (AA REIT) and Stockland has signed a lease renewal agreement with Optus Administration Pty Limited (Optus), which is AA REIT’s largest tenant, for a further 12-year term at the Optus Centre property in Macquarie Park, New South Wales, Australia.
The new lease renewal will commence from 1 July 2021 following the completion of an asset enhancement initiative (AEI), to cater to Optus’ evolving requirements.
”Optus will continue to occupy the entire net lettable area of the campus for a period of 12 years upon the commencement of the new lease. The new lease 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. Upon the commencement of the new lease, the property will provide an estimated net property income of A$28.3 million in the first year, with average net property income of A$36.5 million over the lease term (after taking into account the lease incentives),” said AA REIT in a statement.
It is one of Australia’s largest recorded lease deals, stated AA REIT.
Based on the latest valuation of the Optus Centre and compared to AA REIT’s purchase price in 2014, the transaction represents a pre-tax equity internal rate of return (IRR) of approximately 17%1 per annum.
Optus is a wholly-owned subsidiary of SingTel Optus Pty Ltd, Australia’s second largest telecommunications company, which is a whollyowned subsidiary of Singapore Telecommunications Limited, Asia’s communications technology group.
Optus Centre is located at Macquarie Park in a suburb in northern Sydney, New South Wales, Australia, and is one of the largest campus style business parks in the country.
It is an established Business Park located approximately 15 kilometres north west of Sydney’s central business district. It is owned through AA REIT’s 49% stake in the Macquarie Park Trust, with its joint venture partner Stockland, owning the remaining 51% (through two separate holdings).
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.