SINGAPORE (Dec 18): In its first foray overseas, SPH REIT says that it is acquiring an 85.0% interest in an Australian property, Figtree Grove Shopping Centre, for a consideration of A$175.1 million ($175.1 million) from an unrelated third party, Swordfish Australian Mid TC, under a unit sale agreement.
The acquisition was made through Figtree Holding Trust, a wholly-owned subtrust of SPH REIT Moelis Australia Trust.
SPH REIT Moelis Australia Trust is in turn jointly held by SPH REIT and entities by the asset management division of Australia-listed Moelis Australia Limited in the proportion of 85:15, respectively. The property price of A$206.0 million was arrived on a willing-buyer and willing-seller basis.
Figtree Grove is a sub-regional shopping centre located in Wollongong and sits on a freehold land area of about 50,900 sqm, and has a gross lettable area of 21,984 sqm with 940 carpark lots.
Currently, the shopping centre is anchored by a 24-hour Kmart, Coles and Woolworths supermarkets, two mini-majors, with 72 specialty stores, nine kiosks, four ATMs and two external tenancies, as well as one padsite, offering a variety of services, F&B dining options and other retailers providing convenience and necessity to residents.
This acquisition is in line with the REIT’s strategy to acquire retail properties in Asia Pacific that complements its existing portfolio to provide unitholders with regular and stable distributions, sustainable long-term growth in distributable income and distribution per unit, while maintaining an appropriate capital structure.
SPH REIT will be funding this acquisition via a combination of debt and internal sources. Post transaction, the REIT’s gearing ratio is expected to be about 30.1%.
Susan Leng, CEO of SPH REIT’s manager says, “We are pleased to announce the acquisition of an established sub-regional shopping centre in Australia with our Joint Venture Partner, Moelis Australia Limited. The acquisition of Figtree Grove Shopping Centre is a strategic fit with SPH REIT’s portfolio of quality assets and in-line with our strategy to expand our footprint into Australia. With a WALE of 5.4 years by income and built-in rental escalations, the acquisition will provide stable and growing income to our unitholders.”
Units in SPH REIT closed at $1.01 on Tuesday.
