Centuria Settles 203 Pacific Highway Acquisition
St Leonards is expected to perform strongly on the back of improved transport infrastructure and commercial space shrinkage due to residential conversions.
Centuria Property Funds Limited today announces that it has settled the acquisition of 203 Pacific Highway, St Leonards for $86.05 million. The property has been acquired by two Centuria funds, the Centuria Metropolitan REIT (CMA) and the Centuria 203 Pacific Highway Fund (Fund) which will each acquire a 50 per cent leasehold interest in the asset.
As announced on the ASX earlier today, CMA has fully debt funded the acquisition of its 50 per cent interest in 203 Pacific Highway, while the Fund will acquire its 50 per cent interest using a mixture of both debt and equity. The $30 million equity raising closed early being oversubscribed.
203 Pacific Highway is an A-grade office building prominently located over the St Leonards Railway Station in the heart of the St Leonards business precinct, just five kilometres north of the Sydney CBD. Constructed in 2000, the building provides modern amenities, coupled with large floor plates and Sydney CBD views.
The asset was acquired on an initial yield of 8.1 per cent. The building has a weighted average lease expiry of 5.0 years by NLA as at 1 December 2015, underpinned by major tenants Primary Health Care, Cardno and Verizon.
Centuria believes that the outlook for the St Leonards office market is very positive, with residential conversions forecast to reduce competing office stock, and the Sydney Metro infrastructure project expected to improve St Leonards’ connectivity for both office workers and residents.
This transaction follows closely on the announcement last month of Centuria’s successful
$104 million acquisition of the hotly contested Australian Technology Park assets which are earmarked for repositioning to add value, aligning with Centuria’s strategic approach of identifying investment opportunities, and implementing strategies that produce great returns for investors. Centuria has also recently sold 175 Castlereagh Street, and 80 Waterloo Road and 16 Byfield Street, Macquarie Park which showed impressive returns for the Investor clients.
Group CEO John McBain commented “This purchase is an excellent example of Centuria utilising its property skill-base to identify and execute on an opportunity to enable the listed and unlisted vehicles to jointly acquire what we believe will be a well-performing asset in an excellent location.
“We will continue to grow funds under management by careful analysis of markets and backing ourselves where we see opportunity to add value and being able to act swiftly and decisively to execute on transactions.”