AOF books $16m uplift from DA Approval

Australian Unity Office Fund announced that the Sydney Central City Planning Panel has approved AOF’s development application relating to a ~28,000 sqm commercial office building at 2-10 Valentine Avenue, Parramatta.

James Freeman, AOF’s Fund Manager said “Approval of this development application represents a significant milestone for AOF following receipt of the site specific planning proposal in March.”

“The additional developable area is likely to add considerable value for AOF unitholders when we obtain a tenant pre-commitment for the proposed development. We are actively working to seek such a commitment and expect a number of significant leasing briefs to come to market in the short to medium term which would fit well with the specifications of our building.”

This development consent follows gazettal of the site specific planning proposal on 28 February 2020, now formally known as Parramatta Local Environmental Plan Amendment No. 44, which increased the floor-space-ratio for the site from 6.1:1 to 13.25:1 and amended the height limit applicable to the site. Parramatta Council had previously approved a ~8,000 sqm building on the site.

The development approval recently received (DA/517/2019) provides for an additional ~20,000 sqm, taking the total developable area to ~28,000 sqm (2 Valentine Avenue), in addition to the existing building of 16,020 sqm on the site (10 Valentine Avenue).

In line with AOF’s Valuation Policy, given approval of the development application, AUIREL has independently revalued 2-10 Valentine Avenue, Parramatta as at 31 March 2020.

This valuation includes an assessment of market movements relating to the existing building at 10 Valentine Avenue, Parramatta and the proposed development at 2 Valentine Ave, Parramatta – noting that both are on the same title. The revised valuation is $138.5 million, representing an increase of approximately $16.3 million above the 31 December 2019 book value or approximately 10 cents per unit.

Commencement of the development is subject to a number of conditions including board approval of a tenant pre-commitment for part or all of the building and a major works contract with a builder. Once a tenant pre-commitment has been achieved, AUIREL will revalue AOF’s Valentine Avenue, Parramatta property again in line with its Valuation Policy.