Keppel REIT has entered into an agreement with the Goodman to acquire a 100% stake in Pinnacle Office Park, a freehold Grade A commercial property comprising three office buildings located within Macquarie Park in Sydney.
The agreed property value is A$306.0 million.
Mr Paul Tham, CEO of the Manager, said, “With an initial net property income yield of 5.25% , the acquisition of Pinnacle Office Park is in line with our active portfolio optimisation strategy to improve Keppel REIT’s income resilience and portfolio yield. The expansion into the Grade A metropolitan office space strengthens our portfolio as it complements our prime CBD offering.”
“In the wake of COVID-19, we believe demand in Australia for quality and well-networked metropolitan locations, such as Macquarie Park, will increase as more companies seek cost-effective solutions or adopt a hub-and-spoke business model for office locations. The acquisition of Pinnacle Office Park allows Keppel REIT to gain exposure to this key metropolitan office market.”
With a total net lettable area (NLA) of 35,132 sm (378,165 sf) across three office buildings, Pinnacle Office Park is strategically located within Macquarie Park. Macquarie Park is the second largest office market in New South Wales and has benefitted from improvements in transport infrastructure.
Sited close to the Macquarie Park Metro Station and a major bus interchange, Pinnacle Office Park is well served by public transportation and major arterial roads that provide direct links to the CBD. The expected completion of the City and Southwest metro rail in 2024 will also improve the commuting time between Macquarie Park and the CBD to just 20 minutes.
Tenants enjoy on-site amenities including a childcare centre, a gymnasium, end-of-trip facilities and a café. The property is also close to a range of retail, food and entertainment options at Macquarie Centre, Sydney’s largest suburban shopping centre.
One of the three free-standing buildings, 6 Giffnock Avenue, has the potential to be re-developed into a new office building with higher NLA in future , subject to approval by local authorities.
With an established tenant base, Pinnacle Office Park has a committed occupancy of 96.3% . Key tenants include ASX-listed Aristocrat Technologies, Konica Minolta and Coles Supermarkets. The property has a weighted average lease expiry of 4.8 years by NLA, and its existing leases have fixed annual rental escalations of between 3% and 4%.
Keppel REIT has assets under management of approximately $8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea.
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