Suntec REIT acquires landmark office tower in North Sydney Central Business District
Written by The Edge
Friday, 15 November 2013 22:48
The manager of Suntec Real Estate Investment Trust (Suntec REIT) ha agreed to acquire a 100% interest in 177-199 Pacific Highway, a freehold land and property to be developed for a consideration of A$413.19 million ($481.8 million).
The property is a 31-storey A grade commercial tower which is targeted for completion in early 2016. With an net lettable area (NLA) of 423,915 sq ft, the property is located in one of the most prominent sites in North Sydney Central Business District at the junction of Pacific Highway and Berry Street.
The property is 100% pre-committed with the Leighton Group, one of Australia’s largest building, contracting and property development group taking a head lease of 76% of the net lettable area. The average weighted average lease expiry of Leighton Holdings’ lease (“WALE”) is 10 years. The property will be home to Leighton Holdings’ corporate headquarters. Leighton Holdings will also provide a rental guarantee for four years for any vacant space on completion.
Yeo See Kiat, Chief Executive Officer of the manager, said: “The transaction will improve earnings and boost distribution income to unitholders as there will be coupon payments of 6.32% per annum payable to Suntec REIT during the construction. In addition, unitholders will enjoy income certainty and stability through the long lease terms with annual rental escalations.”
Designed by award winning architecture firm Bates Smart, the new building will feature state of the art design elements and will set a new benchmark for office buildings in North Sydney.
The transaction will be fully funded by a $500 million 5-year unsecured loan facility provided by Commonwealth Bank of Australia, DBS Bank and Standard Chartered Bank. Standard Chartered Bank acted as the financial advisor to the Transaction.
Publish date: 15/11/13