For the second time in a week a Singapore-based real estate investment trust has purchased office space in Sydney’s Macquarie Park suburb.
On 13th September, Keppel REIT announced that it had bought the Pinnacle Office Park in Sydney from Australian developer, Goodman Group, for A$306 million. Less than a week later on 18th September, CapitaLand’s Ascendas Real Estate Investment Trust (SGX:A17U) announced that it had signed an agreement to acquire MQX4 at 1 Giffnock Avenue in Macquarie Park for approximately A$170 million.
Macquarie Park is being marketed as an attractive alternative to Sydney’s central business district with rents up to 60% cheaper. The new Sydney Metro line opening in 2024 will offer Macquarie Park residents with a direct 20minute connection to the CBD. Companies with significant offices in the suburb include Novartis Pharmaceuticals, Boehringer Ingelheim Animal Health, Johnson & Johnson Medical, Optus and Fuji Xerox.
MQX4 is currently being developed by Australand Industrial No. 122 Pty. Limited and Winten (No 35) Pty Ltd with an expected completion date of mid-2022.
The 9-storey building includes 19,384sqm of net lettable area, including 17,753sqm of office space and 1,631sqm of retail space on the ground floor of the building.
The final purchase price will depend on the final building specifications as well as actual rental and term of the leases entered into for the vacant spaces during a rental guarantee period.
The proposed acquisition will be funded by Ascendas REIT through internal resources together with existing debt facilities.
Ascendas REIT are already active investors in Australia and the new acquisition increases the Australian share of their portfolio from 13% to 14%. As well as offices, Ascendas also owns a number of logistics facilities and distribution centres in Australia, with total investments in the country valued at S$1.72 billion.