Singapore’s largest listed business space and industrial real estate investment trust Ascendas Reit has proposed to acquire a Sydney-based office building for A$167.2 million ($122.3 million).
The asset, MQX4, will be bought from Frasers Property Industrial and Winten Property Group – the developers who will design and build the project.
The purchase consideration is in line with the ‘as if complete’ market valuation of MQX4 as of 1 July 2020, Ascendas Reit said in a statement.
Net property income yield for the first year would be approximately 6.1 per cent post-transaction costs, it added.
The land sale is set to occur in the fourth quarter this year, and MQX4 is expected to be completed around mid-2022.
The acquisition will be funded by Ascendas Reit through internal resources and/or existing debt facilities, the investment trust said.
“We are delighted to secure our first suburban office property in Macquarie Park, Sydney’s premier innovation location, and Ascendas Reit’s fifth suburban office asset in Australia. We believe that decentralisation trends will continue to benefit Macquarie Park which has already attracted many leading companies who have set up their headquarters in the precinct,” said William Tay, executive director and CEO of Ascendas Funds Management (S) Limited, the manager of Ascendas Reit.
“This DPU accretive investment will enhance the quality and resilience of Ascendas Reit’s Australian portfolio further given its excellent location and sustainable building design,” he added.
MQX4, upon completion, will be a nine-storey building comprising a total net lettable area of 19,384 sq m made up of both office and retail space.
The project is located in Macquarie Park, the largest metropolitan market in Australia, occupied by national and international corporate headquarters across the pharmaceutical, technology, electronics and telecommunications industries, according to the statement.
Ascendas Reit’s portfolio includes business and science parks, suburban office properties, high-specification industrial properties, light industrial properties, logistics and distribution centres, and integrated developments, amenities and retail properties, across Singapore, Australia, the UK and the US.
Its assets under management reached S$12.75 billion ($9.4 billion) as of the end of June 2020.
Ascendas Reit is managed by Ascendas Funds Management (S) Limited, a wholly-owned subsidiary of Singapore-listed CapitaLand Limited.