Singapore Exchange (SGX)-listed Suntec REIT on Monday announced the acquisition of a 12-storey Grade A office building in Adelaide for A$148.30 million ($104.40 million).
It bought the building, which is located at 55 Currie Street, from AEP Currie.
The property is located in the western core of Adelaide’s central business district and is a five-minute walk to the Adelaide railway station. It has approximately 282,000 square feet (sq ft) in net lettable area and a basement carpark that can accommodate 95 car park bays.
Completed in 1988, the office building has undergone several rounds of asset enhancement initiatives. Its committed occupancy is 91.6 per cent and key tenants include the Commonwealth Government, South Australian Government, Allianz and Data Action.
The A$148.30 million purchase price was negotiated on a willing-buyer and willing-seller basis, taking into account the independent valuation conducted by Knight Frank Valuations (KF) in April.
The total estimated acquisition cost, including the purchase price, works out to be approximately A$151.50 million ($106.65 million). The total cost takes into account the acquisition fee of A$1.50 million ($1.06 million) payable to Suntec REIT’s manager, ARA Trust Management (Suntec) Limited; the purchase price of A$148.30 million ($104.40 million); and estimated professional and other fees/expenses of approximately A$1.70 million ($1.20 million).
ARA Suntec said the acquisition is expected to be distribution per unit (DPU) accretive to unitholders with net property income (NPI) yield of approximately 8.0 per cent (including rent guarantee) and income growth through rent escalation between 3.50 per cent and 3.75 per cent.
Suntec REIT units were trading at S$1.95, up 0.52 per cent, at 10:06 am SGT on Tuesday.