This article is from the Australian Property Journal archive
AFTER missing out on a Melbourne office building, Singapore’s Keppel REIT has bought a Macquarie Park office park from Goodman Group for $306 million on a net yield of 5.25%. The Asian asset manager believes there will be greater demand for metropolitan accommodation in the wake of COVID-19 as more companies adopt a hub-and-spoke business model.
Keppel REIT Management CEO Paul Tham said the acquisition of Pinnacle Office Park is in line with its strategy to improve Keppel REIT’s income resilience and portfolio yield.
“The expansion into the Grade A metropolitan office space strengthens our portfolio as it complements our prime CBD offering,” he said.
Tham said the acquisition will also capitalise on demand for metropolitan office in the wake of COVID-19.
“In the wake of COVID-19, we believe demand in Australia for quality and well-networked metropolitan locations, such as Macquarie Park, will increase as more companies seek cost-effective solutions or adopt a hub-and-spoke business model for office locations. The acquisition of Pinnacle Office Park allows Keppel REIT to gain exposure to this key metropolitan office market,” he added.
Pinnacle Office Park comprises three office buildings with a total net lettable area of 35,132 sqm. One of the buildings, 6 Giffnock Avenue, has the potential to be re-developed into a new office building with higher NLA in future , subject to approval by local authorities.
The office park currently has an occupancy of 96.3% and is leased to Aristocrat Technologies, Konica Minolta and Coles with a weighted average lease expiry of 4.8 years by NLA, and fixed annual rental escalations of between 3% and 4%.
Following the acquisition, Keppel’s assets under management will grow to $8.2 billion across 10 properties in Singapore (77.0%), Australia (19.4%) and South Korea (3.6%).
This is the second major transaction in a week after Dexus last week sold 452 Flinders St in Melbourne’s CBD for more than $450 million after paying $194 million in 2011 for the 20-level 38,000 sqm A grade office tower.
Keppel and Charter Hall were underbidders to buy 452 Flinders St but they were pip to the post by Germany’s Deka Immobilien.
