Hong Kong-listed Link Real Estate Investment Trust (Link REIT) announced it will acquire a 10-storey A grade office tower at 100 Market Street in Sydney from certain funds managed by Blackstone for AUD 683 million (HK$3.649 billion).
“The Property is a stable and quality asset. The acquisition will drive growth in sustainable income and capital value, with limited downside risk,” said Link Chief Executive Officer George Hongchoy.
“A more diversified portfolio with overseas properties providing new sources of income will help ease our reliance on Hong Kong properties to generate income progression, and contribute to a healthier growth trajectory,” he added.
The office property is in a premium location with excellent accessibility and amenities. Situated within a mixed-use development bounded by Market, Pitt and Castlereagh Streets in the midtown precinct, the Property has a total net leasable area of 28,385 square metres spread over 10 storeys.
The Property is rare single-owner asset which is currently fully occupied by three blue-chip tenants, notably a sovereign wealth fund, a Commonwealth government body and an S&P/ASX100 listed property investor. The Property has a weighted average lease expiry (by rental income) of 8.45 years with leases expiring between 2027 and 2030, and a net passing income of approximately AUD26.7 million per annum as at 16 December 2019.
The term of the Property lease is 299 years, commencing on 27 June 2019 and ending on 26 June 2318. The transaction price reflects the valuation by Colliers International (Hong Kong) Limited on 16 December 2019.
The transaction marks Link’s first acquisition outside of Hong Kong and Mainland China. The company intends to increase its exposure in Mainland China and the gateway cities of other major developed markets, such as Australia, Singapore, Japan and the UK, due to their relative market stability and liquidity, as well as transparent regulatory environments.