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Ascendas REIT acquires CBD fringe office property in Australia for $90 mil

By Samantha Chiew

/ The Edge Singapore |

September 26, 2017 10:04 AM SGT

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SINGAPORE (Sept 25): Ascendas Funds Management, the manager of Ascendas REIT, has completed its acquisition of a CBD fringe office property located at No. 100 Wickham Street in Queensland, Australia for A$83.8 million ($89.8 million) from 100W.

The freehold 14-storey office building is currently fully occupied with key tenants like the State of Queensland department of Health and three data centre operators.

The property has a total lettable floor area of 13,131 sqm and is located 450m from Brisbane’s CBD.

The leases have annual rental escalations of 3% to 4% with a weighted average lease expire (WALE) of 4.8 years as at June 30.

Net property income yield for the first year is 7.6% and 7.1% pre-transaction costs and post-transaction costs respectively.

Meanwhile, the annualised pro forma financial effect of the acquisition on FY16/17 distribution per unit (DPU) would be an improvement of 0.054 cents.

Including this acquisition, Ascendas REIT will own 101 properties in Singapore and 30 in Australia.

Its portfolio pro forma WALE is expected to maintain at 4.3 years as at end June.

The acquisition was funded through internal resources and existing debt facilities.

Chia Nam Toon, executive director and CEO of the manager, says, “No. 100 Wickham Street is an attractive deal with a potential NPI yield of 7.1%. We are optimistic about the long term growth potential of the area, and will continue to look at other accretive investments.”

Units in Ascendas REIT closed at $2.68.

This story, written by Samantha Chiew, first appeared on The Edge Singapore.

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