Singapore-listed commercial landlord Suntec REIT (SGX:T82U) looks set to add an Australian office tower to its portfolio of properties. The building, which will be located at 177-199 Pacific Highway, will be the REIT’s first overseas property since its establishment.
|Suntec REIT will make its first acquisition outside Singapore in Sydney. Photo: Suntec REIT.|
The property in question is a 31-storey Grade A commercial tower which is targeted for completion in early 2016 with an approximate net lettable area of 423,915 square feet. Australian-based property developer Leighton properties is slated to sell the development project to Suntec REIT for a consideration price of A$413.19 million and will continue to rent the premises from Suntec REIT for at least 10 years. Leighton Holdings will also provide a rental guarantee for four years for any vacant space on completion.
Commenting on Suntec REIT’s first cross border acquisition outside Singapore, Mr. Yeo See Kiat,Chief Executive Officer of the Manager, said, “When completed, 177 Pacific Highway will be the most iconic building in North Sydney. It is a strategic fit with Suntec REIT’s portfolio of high quality commercial assets in Singapore and is in line with our growth strategy to expand our footprint in Asia Pacific and enhance Suntec REIT’s income and geographical diversification.”
Mr Yeo added, “The transaction will improve earnings and boost distribution income to unitholders as there will be coupon payments of 6.32 per cent per annum payable to Suntec REIT during the construction. In addition, unit holders will enjoy income certainty and stability through the long lease terms with annual rental escalations.”
Units of Suntec REIT ended the day 1.28 per cent higher at S$1.59 on the Singapore Exchange.