Ascendas REIT acquires first suburban office asset in Australia

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Ascendas REIT is acquiring a suburban office building to be developed at 1 Giffnock Avenue, Macquarie Park, Sydney for AU167.2 million (SGD161.0 million).

The property will be acquired from Frasers Property Industrial and Winten Property Group.

“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, CEO of Ascendas REIT’s manager.

“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.

The property sits on freehold land of 3,308 square metres and on completion will comprise a total net lettable area of 19,384 square metres including office and retail spaces.

Net property income yield for the first year is approximately 6.1% post-transaction costs.

The pro forma impact on DPU for the 12 months ended 31 December 2019 would be an estimated improvement of 0.046 Singapore cents assuming that it was acquired and completed on 1 January 2019.

The completion of the land sale is expected to occur in 4Q 2020, and the property is expected to be completed around mid-2022.

The vendors will provide a three-year rental guarantee from completion of the property for any vacant spaces.

Ascendas REIT will fund the acquisition via existing debt facilities.

The REIT was last done on the Singapore Exchange at SGD3.28, which is a premium of about 50% to book value according to data on the Singapore REITs table.

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