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Investec Australia Property Fund acquires Sydney office building

27 Mar 2015
From
Graeme Katz

Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) yesterday announced the acquisition of a $38.9 million office building in the heart of Sydney’s growth corridor. The acquisition, with a scheduled settlement date of 31 March 2015, is the Fund’s first office acquisition in New South Wales and brings the value of the Fund’s total portfolio to $328 million.

The 11,610 square metre office building, situated at 21-23 Solent Circuit in Baulkham Hills, is located 36 kilometres from the Sydney CBD. The property, located in the Norwest Business Park, will greatly benefit from the construction of the North West Rail Link, due for completion in 2018.

The property is 85% leased with scope to deliver additional income to the Fund through active leasing of the vacant space. The annualised property yield on a fully leased basis would be 9.46%.

The weighted average lease expiry is five and a half years and contracted average annual rental growth rates range from CPI to 4.0%. The property is occupied by high quality tenants comprising a mix of listed, international and national companies, including Clarendon Homes, Novo Nordisk, Bosch and PwC.

IAPF CEO Graeme Katz said the acquisition is accretive to the Fund and represents an attractive spread over the Fund’s borrowing costs.

“We are pleased to make the first office acquisition for the Fund in Sydney. Confidence appears to be growing in the NSW economy and the acquisition increases the Fund’s overall exposure to this market.

“Again, the acquisition aligns well with the Fund’s strategy of investing in well-located, high quality assets,” he added.

IAPF, listed on the Johannesburg Stock Exchange under the Real Estate Holdings and Development sector, provides South African investors with direct access to the Australian commercial property market.

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