Singapore’s CICT Buys Half-stake in Sydney Office Bldg

Singapore’s CICT Buys Half-stake in Sydney Office Bldg For A$422mil

AUSTRALIA –CapitaLand Integrated Commercial Trust (CICT) has struck a deal to purchase a 50 percent interest in a North Sydney mixed-use project with a huge amount of office space for A$422.0 million ($305 million), according Singapore bourse (SGX) filings published on Thursday evening (23 December, SGT).

This marks Singapore-listed real estate investment trust’s (REIT) 3rd office acquisition in Australia in one month. Interestingly, the latest purchase is merely a 10-minute drive from 66 Goulburn Street and 100 Arthur Street, 2 Grade A office buildings CICT acquired earlier this month for a total of A$330.7 million.

The acquisition “will strategically augment our presence in Sydney, where we have embarked on acquiring 66 Goulburn Street and 100 Arthur Street. The total investment of approximately A$1.1 billion (S$1.1 billion) in the 3 Sydney properties will provide CICT with a new engine of growth in a developed market with strong fundamentals, and the potential to ride on the city’s gradual recovery and rejuvenation in the mid to long term,” said Tony Tan, Chief Executive of CICT’s manager.

CICT’s newest acquisition in Australia is known as 101 Miller Street, which consists of a 2-storey office block and a 28-storey Premium Grade office tower, as well as a retail centre called Greenwood Plaza. All the properties stand on a 127,768 sq ft site.

The half-stake in the freehold commercial property is being acquired from fund management giant Nuveen. The remaining 50 percent interest is held by Mirvac Commercial Trust.

In total, 101 Miller Street has a net leasable area (NLA) of 499,478 sq ft. Of this, 96,122 sq ft or 19.2 percent is occupied by retail space, while 403,356 sq ft or 80.8 percent is intended for office use.

At present, the commercial property is occupied by around 90 tenants and it has a committed occupancy of 94.9 percent, with a weighted average lease expiry (WALE) of 3.6 years. Based on pro forma H1 2021 annualised net property income (NPI), the NPI yield works out to 4.9 percent.

Notably, 101 Miller Street was completed in 1992 and its last refurbishment was in 2008. As for Greenwood Plaza, it’s 1992 and 2013 respectively.

Apart from having direct access to Sydney’s major arterial roads, the commercial property is directly integrated with the North Sydney Train Station, whereas the upcoming Victoria Cross Metro that will be operational by 2024 is just 200 metres away.

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