Singapore-based Keppel REIT announced it has entered into an agreement with the Goodman Group to acquire a 100% stake Pinnacle Office Park, a freehold Grade A commercial property comprising three office buildings located within Macquarie Park in Sydney for A$306 million (approximately S$303.3).
With a total net lettable area (NLA) of 35,132 sm (378,165 sf) across three office buildings, Pinnacle Office Park is located within Macquarie Park. Macquarie Park is the second largest office market in New South Wales and has benefitted from improvements in transport infrastructure.
Sited close to the Macquarie Park Metro Station and a major bus interchange, Pinnacle Office Park is well served by public transportation and major arterial roads that provide direct links to the CBD.
”With an initial net property income yield of 5.25% , the acquisition of Pinnacle Office Park is in line with our active portfolio optimisation strategy to improve Keppel REIT’s income resilience and portfolio yield. The expansion into the Grade A metropolitan office space strengthens our portfolio as it complements our prime CBD offering,” said Paul Tham, CEO of the Manager.
“In the wake of COVID-19, we believe demand in Australia for quality and well-networked metropolitan locations, such as Macquarie Park, will increase as more companies seek cost-effective solutions or adopt a hub-and-spoke business model for office locations. The acquisition of Pinnacle Office Park allows Keppel REIT to gain exposure to this key metropolitan office market,” he added.
With an established tenant base, Pinnacle Office Park, a freehold Grade A commercial property in Sydney, has a committed occupancy of 96.3%, says the company. The property has a weighted average lease expiry of 4.8 years by NLA, and its existing leases have fixed annual rental escalations of between 3% and 4%.