CICT to acquire two Grade A office buildings in Sydney for A$330.7m

CICT to acquire two Grade A office buildings in Sydney for A$330.7m
66 Goulburn Street is a 24-storey Grade A office building, located in Sydney CBD Image: Courtesy of CapitaLand

Singapore-listed CapitaLand Integrated Commercial Trust (CICT) is acquiring two Grade A office buildings, 66 Goulburn Street and 100 Arthur Street, located in the central business districts (CBD) of Sydney, Australia, for A$330.7 million (S$330.7 million).

CapitaLand Integrated Commercial Trust Management Limited, the Manager of CICT, said Friday that CICT has entered into a unit sale agreement with CLA Real Estate Holdings Pte. Ltd. (CLA) to acquire the units in two trusts that hold the office buildings.

This marks CICT’s first inroad into Australia, its second overseas developed market after Germany, said the Manager in a statement.

Located in Sydney CBD, 66 Goulburn Street is a 24-storey Grade A office building with ancillary retail space, and a basement car park. The building’s energy-saving features include double-glazed windows and an intelligent lighting control system. With a central lift core, the building offers efficient and column free floor plate which ranges from 937 square metres to 975 square metres.

100 Arthur Street is a 23-storey Grade A office building with ancillary retail space sited in North Sydney CBD. It underwent a major refurbishment at a total cost of approximately A$17 million from 2019 to 2021 to enhance its lobby, entrance foyer, vacant floors and equipment upgrades. To improve the well-being of occupants, the building’s end-of-trip facilities that encourage green mobility were also revamped.

Teo Swee Lian, Chairman of CICTML, said: “Despite the evolving pandemic situation, this is an opportune time for CICT to enter Australia, given its attractive office market underpinned by healthy economic fundamentals in the medium to long term, and expected recovery as the country emerges from COVID-19 restrictions. In particular, Sydney is witnessing major
development and rejuvenation initiatives in line with its government-backed ambition to become a leading innovation and technology hub in the region. The acquisition will allow CICT to gain a foothold in Australia, one of Asia Pacific’s largest developed markets, and open CICT to more opportunities to drive growth. We are also pleased to be investing in Sydney, which is striving to become a climate leader under its Sustainable Sydney 2030 community plan. The addition of the NABERS-rated properties complements CICT’s 100% green rated portfolio and supports the Trust’s sustainability commitment.”

Tony Tan, CEO of CICTML, said: “The acquisition is part of our continual efforts to reconstitute and optimise CICT’s portfolio for sustainable returns and growth.  It enables the recycling of capital from the divestment of our 50.0% interest in One George Street, at an exit yield of 3.17% per annum, into two higher-yielding office assets in Australia, at a combined implied net property income yield of 5.2%9 per annum.  The two assets are complementary to CICT’s portfolio, and will enhance our portfolio resilience with further geographical and income diversification.  Riding on the post-lockdown recovery of Australia’s economy, we expect to ramp up occupancy and drive rental growth of the two assets through proactive lease management.”