This article is from the Australian Property Journal archive
MACQUARIE Office Trust has sold a property in Hay St, West Perth for $38 million after holding it for 11 years.
The sale of 1100 Hay St will deliver a 54% gain above historical cost and an 11.4% annualised return for the trust over the 11 years since acquisition. But the price is $7.4 million below its December 2008 book value of $45 million.
CEO Adrian Taylor said the sale reinforces the trust’s ability to deliver on asset sales, with over $461 million of asset disposals completed since December 2008.
“The sale also allows the trust to continue its strategy of repaying debt and strengthening the balance sheet. As a result of this transaction and the trust’s other recent asset sales, balance sheet gearing is anticipated to reduce to 31.0%,” he added.
1100 Hay St is a six level, A-grade office building with three levels of parking. MOF bought the property in 1997 for $22.1 million.
The property has a net lettable area of 7,245 sqm and 197 car spaces. It is currently returning gross rent of approximately $3.8 million pa and the major tenants include Technip Oceania and the Bureau of Meteorology.
Settlement is expected prior to the end of June, and proceeds will be applied against debt and to provide further liquidity.
In Melbourne, the trust has secured four new leases at 5 Queens Rd totalling 5,580 sqm, representing more than 30% of the building. Fit-out and refurbishment company, Isis, leased 2,427 sqm and IT services company Unico leased 2,386 sqm – for 7.3 and 5.4 year terms respectively. Existing customers, Beca and Leighton, have also expanded their leases over an additional 363 sqm and 404 sqm respectively.
The new leases will extend the WALE from 2.2 to 4.2 years and improve occupancy from 75% to 93%. Heads of Agreement have been signed for an additional 570 sqm which will further improve occupancy to 96%.
Meanwhile MOF has negotiated a five year extension to the loan at City Central Milan for €76.5 million, until October 2014.
And Taylor said the trust continues to work on a number of strategies for its properties in Germany, including marketing the Frankfurt property for sale.
In the United States, MOF has secured a major lease renewal secured at San Diego Tech Center
Sony Computer Entertainment America covering 184,171 sqft, representing 28% of the property.
Australian Property Journal
