Centuria Property Funds settle on landmark ATP acquisition after record investor interest
Sydney, 22 April 2016
Centuria Capital today announced the settlement of Centuria Property Funds’ $104 million stake in the landmark Australian Technology Park (ATP) in inner city Sydney following record investor interest in its corresponding unlisted Centuria ATP Fund.
Centuria received over $130 million of Investor interest for the available $62 million of equity, with the retail equity raising closing after only 6 days.
Forecast distribution yields in the sought-after Fund are annualised 8.7% for FY 2016 and 9.0% for FY 2017.
In more good news for Fund investors, ATP cornerstone tenant, NICTA, signed a new 10-year lease, doubling the 5-year lease term anticipated in the Fund PDS.
“The volume of interest in the Fund signals very strong investor affinity with Centuria’s long term property strategy, where we seek opportunities to add value in key locations across both listed and unlisted sectors,” explained John McBain.
“We’re extremely pleased with the outlook and believe our investors will be, too.”
According to Jason Huljich, CEO of Centuria Unlisted Property Funds, both the Fund subscription and leasing results bode well for a positive future for investors.
“To experience this level of interest shows that the market for quality unlisted property investments is still very strong and there is a lot of faith in our ability to build on successes such as the sale of 80 Waterloo Rd, Macquarie Park and the great results delivered for investors in 175 Castlereagh St in the Sydney CBD.,” he explained.
“In terms of the NICTA lease, this delivers long term income security over ~53% of the NICTA Building Nett Lettable Area and dramatically reduces short term leasing risk. It also sets a strong market precedent for future lease negotiations within the precinct.”
Under the new leasing arrangement, the NICTA Building WALE (by income) increases from 1.2 years to 7.0 years and the Portfolio WALE (by income) from 2.1 years to 5.3 years. The rent increases from $478/sqm gross effective to $625/sqm gross face.
The ATP acquisition has been a source of major investor and other public interest, and exemplifies the broader Centuria strategy.
“We identified the Australian Technology Park precinct as an important business and technology hub in 2013 when a Centuria fund acquired a 50% interest in the $220 million Channel Seven building,” said Mr McBain.
“Centuria funds now wholly own the Channel Seven building and the Group is excited to extend its investment in the precinct with the settling of this latest acquisition and the associated Fund.”
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For more information or to arrange an interview, please contact:
CEO – Unlisted Property Funds
Centuria Property Funds
Head of Communications