Singapore listed CapitaLand Integrated Commercial Trust (CICT) has purchased a 50% interest in North Sydney’s Greenwood Plaza and neighbouring office, 101-103 Miller Street from Nuveen.
Capitaland paid $422 million for the 50% interest, struck at a 5.6% passing yield. Mirvac continues to hold the remaining 50% interest.
Greenwood Plaza is located at 101–103 Miller Street and 36 Blue Street, North Sydney and includes an iconic 28-storey Premium Grade office tower, a 2-storey office building, and a retail centre. The property has a site area of 11,870 sqm with a net lettable area of 46,403 sqm (comprising 37,473 sqm of office space and 8,930 sqm of retail space) with 531 car park lots and 170 bicycle lots. The Property has a committed occupancy rate of 94.9% with a total of about 90 tenants.
As part of the deal, Nuveen has agreed to provide a rental guarantee of A$7.0million in view of any potential impact to the tenants as a result of the ongoing COVID-19 situation in Sydney. The entire amount of the Rental Guarantee will be paid by the Vendor at completion of the Acquisition as part of the settlement of the Purchase Price.
The Property has a weighted average lease expiry (“WALE”) of 3.6 years (based on committed gross rental income, excluding gross turnover rents) and there are annual rent escalations in the existing leases ranging from 3% to 5%. The Property has a net property income (“NPI”) yield of 4.9% (based on 1H 2021 annualised NPI) and a passing yield of 5.6% (as at 1 December 2021).
Colliers’ Adam Woodward, Lachlan MacGillivray and James Barber with Knight Frank’s Ben Schubert and Tyler Talbot were the agents.
With acquisition fees of $4.2m payable to the Manager of the Fund and other expenses of c$28.2m, CCIT will invest $454.4m in the property.
The acquisition, along with the proposed acquisitions of 66 Goulburn Street and 100 Arthur Street announced on 3 December 2021, is part of CICT’s portfolio reconstitution journey to drive sustainable growth and diversify income sources through accretive acquisitions and recycling capital into higher yielding assets. The entry into Australia will provide CICT with a new engine of growth in a developed market with strong fundamentals, and the potential to ride on Sydney’s gradual recovery and rejuvenation in the mid to long term.
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