This article is from the Australian Property Journal archive
MACQUARIE Office Trust has maintained a high occupancy rate across its Australian portfolio but the same cannot be said for its United States properties where vacancy rates have risen.
The trust also said it has one debt exposure remaining for the current financial year is an asset level non recourse $US60 million facility over One and Three Christina Center in Wilmington, Delaware which matures on January 01 2009.
For the quarter ending September 30 2008, despite continued market volatility, the trust leased around 27,729 sqm of leases including 10,777 sqm executed taking the global portfolio occupancy rate to 95%.
The Australian portfolio’s occupancy rate remained strong at 99% with commitments including letters of intent for 12,174 sqm including leases executed across 4,701 sqm.
Transactions during the period included IT company, Oakton, signing a new lease at The Denison, North Sydney for 1,084 sqm for five years. Agreements to lease 3,442 sqm of space at NCR House in North Sydney were reached with The Australian Catholic University, and IDG Communications and Ifra Corporation who each committed to two floors within the property.
But in US portfolio, occupancy has declined from 94% to 92%, following the previously announced hand-back of space by SunTrust Bank in Orlando.
MOF said continued uncertainty within the US housing and financial sectors has impacted business confidence.
“Tenants remain cautious, with many electing to postpone leasing decisions until global economic conditions improve.
“Despite these challenging market conditions, commitments including letters of intent were received in relation to over 138,228 sqft of space including leases executed across 48,926 sqft in the US portfolio during the quarter,” the trust added.
In the European & Japanese portfolio, at City Central, Milan, the trust continued to have success, with commitments secured over a further 2,007 sqm of the property for six year terms, including a lease signed to the Hay Group over 1,056 sqm, taking the property to an occupancy rate of 85% upon signing of the relevant documents.
In Japan, leasing commitments on the Tokyo properties totalled 214 tsubo (707 sqm). As at September 30, two thirds of these have been executed, improving occupancy from 86% to 96%.
MOF said continued volatility in global markets is expected to remain challenging for some time.
“However, the trust’s high quality portfolio is geographically diversified with long-term lease maturities and maintains high occupancy levels.
“During this difficult time, maximising property incomes and occupancy across the portfolio remains a key priority for the trust, together with a focus on capital management initiatives,” the trust continued.
MOF said its balance sheet gearing ratio is 41.3% and on a look-through debt to total asset basis, is 48.4% for the trust and its subsidiaries. The trust is in compliance with all debt covenants and reconfirms it has no market capitalisation covenants.
The trust is also continuing on from Australian asset sales of $A118.3 million and US asset sales of $US182.3 million for the past year.
Australian Property Journal
