Ascendas REIT (A17U.SGX) announced the acquisition of Suburban Office at 1 Giffnock Avenue (MQX4) in Macquarie Park at a price of AUD167.2mil.
This property is located in Sydney Macquarie Park, Australia. This is a 9-storey office, including G floor as retail space, plus 204 car parks. The acquisition is expected to be completed in mid-2022.
This is a property that buys first and builds later, and the developer is Frasers Property Industrial and Winten Property Group. I just wonder why to sell to Ascendas instead of FLCT.
Macquarie Park is the headquarters of many MNCs and rents are 60% cheaper than Sydney CBD, which is expected to attract tenants seeking cost savings.
The expected net property income yield for MQX4 is 6.1%, which is higher than the existing 4.2% Net property income yield recorded in Ascendas’ 2019 annual report. Therefore, it is expected that the annual dividend will be increased by 0.046cent (SGD) per unit after the completion of the acquisition.
In fact, MQX4 is only accounted for 1.25% of Ascendas total investment property value SGD12.75bil’s. Although it brings an increase in dividends, it is not much. the purchase will be funded through internal funds or loans.
After the completion of the acquisition, the Australian properties will account for 14% of the total property valuation of Ascendas (currently 13%). This is the second property that Ascendas announced to acquire in 2020. Ascendas is very active in the acquisition and they just announced the acquisition of the logistic property earlier.（click here for more detail）
Ascendas just completed the acquisition of 254 Wellington Road on 11 Sept 2020. Currently, Nissan Motor Co. (Australia) Pty Ltd leases 65.2% of the area.
Recently, Ascendas redeemed SGD300mil, PERPETUAL SECURITIES with an annual interest of 4.75%, and instead issued Green Perpetual Securities with SGD300mil and an annual interest of 3%. It is expected to save SGD5.25mil in annual interest, which is equivalent to 0.14cent(SGD) per unit annual dividend.
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