Singapore-listed real estate investment trust Suntec REIT, managed by ARA Trust Management (Suntec) Limited, a wholly-owned subsidiary of ARA Asset Management Limited (“ARA”), through its wholly-owned sub trust, Suntec REIT 55 Trust, has entered into a contract of sale and purchase to acquire 100% interest in the freehold Grade A office building located at 55 Currie Street, Adelaide, South Australia for A$148.3 million.
55 Currie Street is located within the western core of Adelaide’s central business district and is a 5 minutes’ walk to Adelaide railway station. It is also strategically located at the centre of Adelaide’s burgeoning laneway network.
“We are pleased to expand our footprint in Australia with the acquisition of 55 Currie Street, a Grade A office building situated in the heart of Adelaide’s central business district. Underpinned by a strong cashflow of high quality office tenants, the initial net property income yield of 8.0% will provide immediate DPU accretion upon completion of the acquisition by end August 2019. Unitholders will also enjoy income stability with growth through the annual rental escalations of between 3.50% to 3.75%,” said Chong Kee Hiong, Chief Executive Officer and Director.
“The acquisition of 55 Currie Street further enhances the stability of the REIT’s income. Together with the completion of the existing projects under development and the recent acquisition of 21 Harris Street in Pyrmont, Sydney, approximately 17% of Suntec REIT’s assets under management and approximately 23% of the income contribution will be from Australia,” he added.
The twelve-storey Grade A office building has an approximate net lettable area of 282,000 sq ft and had undergone several rounds of refurbishment. In the recent asset enhancement exercise completed in 2018, major mechanical and electrical plant and equipment that were upgraded included the lift system, chillers and building management system.
The property has a committed occupancy of 91.6% with the Commonwealth Government, South Australian Government, Allianz and Data Action as the key tenants. In addition, the vendor will provide a 27-month rent guarantee for the vacant spaces. The property has a weighted average lease expiry of 4.4 years.