Singapore, 5 August 2016 – ARA Trust Management (Suntec) Limited, the manager of Suntec Real Estate Investment Trust (“Suntec REIT”, and the “Manager”), is pleased to announce that Suntec REIT, through Southgate Trust, in which it holds a 50% indirect interest, has entered into an agreement to acquire 50% interest in the iconic Southgate Complex (the “Property”) from Dexus Southgate Trust (“Dexus”) for a consideration of A$289 million.
In addition, separate put and call option agreements have been entered into with Dexus where the remaining 50% interest in Southgate Complex will be acquired for the same purchase consideration of A$289 million.
Located alongside the Yarra River in the Southbank arts and leisure precinct of Melbourne, Australia, Southgate Complex is a freehold, landmark waterfront integrated development comprising two AGrade office towers, a 3-storey retail podium and a car park with 1,026 lots. The office and retail components constitute approximately 87% and 13% of the total net lettable area (“NLA”) respectively. Surrounded by business, residential, recreational and retail amenities, the Property is directly opposite Flinders Street train station and within close proximity to Melbourne’s city rail loop.
Commenting on Suntec REIT’s second acquisition in Australia, Mr. Yeo See Kiat, Chief Executive Officer of the Manager, said, “We are pleased to acquire the iconic Southgate Complex which is a strategic fit with Suntec REIT’s portfolio of quality assets and in line with our strategy to expand our footprint in Asia Pacific. The acquisition augments Suntec REIT’s presence in Australia.”
The Property has a total NLA of 820,324 sq ft and is leased to well-established tenants such as IBM, The Herald and Weekly Times, Commonwealth of Australia, APT, Dairy Australia, City Road Melbourne and LinkedIn. The committed occupancy was 88% as at 5 August 2016 with a weighted lease expiry of approximately 4.6 years. The annual rental escalations for the office leases are predominantly between 3% to 4%.
5 August 2016
Mr. Yeo said, “The acquisition will further enhance Suntec REIT’s income and geographical diversification. It also offers organic growth potential from the repositioning of the retail component and the strengthening office market in the CBD of Melbourne.”