Keppel REIT has entered a deal to acquire a Sydney commercial property for around $223.6 million, while Mapletree Industrial Trust plans to buy a US-based data centre for up to $262.1 million.
Keppel REIT to acquire Sydney commercial property for $223.6m
Singapore-listed Keppel REIT is acquiring Sydney commercial property Pinnacle Office Park for A$306 million, or around $223.6 million, in a deal to be wholly funded with Australian-dollar-denominated debt, the property trust said Sunday.
The property includes three office buildings in the Macquarie Park area, which is the second-largest office market in New South Wales, the REIT said in a press release.
Paul Tham, CEO of the REIT’s manager, said the initial net property income yield was at 5.25 per cent, and the deal would improve income resilience and yield.
“The expansion into the Grade A metropolitan office space strengthens our portfolio as it complements our prime CBD offering,” Tham said in the statement. “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,” he added.
Investment bank Daiwa said the deal was well-timed for both yield and for diversifying the REIT’s income streams. The bank increased its distribution per unit forecasts by 3-5 per cent for 2021 and 2022. It also raised its target price to S$1.21 from S$1.15, keeping an Outperform call. The REIT’s units were trading around S$1.09 midday Tuesday.
The property has a committed occupancy of 96.3 per cent, with key tenants including ASX-listed Aristocrat Technologies, Konica Minolta and Coles Supermarkets, Keppel REIT said.
The deal is expected to be completed in the fourth quarter.
After completion, Keppel REIT will hold 10 properties across Singapore, Australia and South Korea, with assets under management of $8.2 billion on a pro forma basis.
Mapletree Industrial to acquire US data centre
Singapore-listed Mapletree Industrial Trust has entered a deal to acquire a data centre in Virginia for between $200.6 million and $262.1 million, subject to conditions.
The deal aligns with the trust’s strategy to acquire data centres outside Singapore, Mapletree Industrial Trust said in an SGX filing Monday.
“There has been strong leasing demand for data centre space from content, social media, e-payment, software-as-a-service and other information technology firms during the pandemic,” the trust said.
The trust said the acquisition will be funded with debt financing, proceeds from an equity fundraising and/or internal cash resources.
The property is fully leased on a triple net basis, which assigns maintenance, repair and property taxes to the tenant. The lease term has more than five years remaining and the tenant is a multinational company with strong credit standing, Mapletree Industrial said.
Upon completion, the trust’s assets under management (AUM) will rise to S$6.9 billion ($5.07 billion) from S$6.6 billion, while data centres will rise to 41 per cent of the portfolio by AUM, from 38.5 per cent as of end-June, the trust said.