This article is from the Australian Property Journal archive
ASX-listed A2B is offloading a site in the Green Square urban renewal precinct in Sydney’s inner south for $78 million to developer Double Space.
Sydney-based Double Space is a joint venture between Enice Technology Co. Ltd and Bestplace Corporate Limited. Double Space owns sites around Alexandria, including two large-scale residential development projects.
A2B listed the 9,022 sqm O’Riordan Street property last year alongside the 1,940 sqm 9-13 Bourke Road site with expectations of a combined $100 million. Both sites have flexible B7 Business Park zoning in place. The Bourke Road site was sold in December for $19 million to Singapore-based self-storage property investor and developer StarHub.
The sale price for the O’Riordan Street site is in line with the independent valuation undertaken in May.
Settlement is expected to occur in December, while the Bourke Road sale is expected to settle in April.
A2B has also entered into a 3-year lease back over the O’Riordan Street premises to enable the company to properly consider its longer-term property requirements.
The net proceeds from the sale of A2B’s properties in O’Riordan Street and Bourke Road, after costs and repayment of debt, are expected to be approximately $73 million. The board intends to return these proceeds to shareholders as a fully franked dividend by the end of 2023, assuming settlement of the O’Riordan Street property occurs by this date.
“As part of our ‘Better Before Bigger’ strategy, the board concluded after an external strategic review that owning or remaining in the current sites in the long term was not the right solution for the business,” said A2B’s executive chairman, Mark Bayliss.
“With this agreement to sell the O’Riordan Street property, A2B will have sold both its Sydney properties, optimising shareholder value and facilitating an attractive cash return to shareholders.”
A2B expects the net negative impact to EBITDA as a result of the sale of O’Riordan Street and Bourke Road as well as the leaseback of O’Riordan Street should be approximately $2 million for FY24 and approximately $4 million for FY25.
