Metro Holdings, together with its joint venture (JV) partner, Sim Lian, have agreed to acquire 1 Castlereagh Street in Sydney, New South Wales, Australia, for A$196.4 million ($172.3 million). A sale and purchase agreement (SPA) was entered into between SLMC Property Australia and an independent third party on the same day. SLMC Property Australia is 30% indirectly owned by Metro and 70% indirectly owned by Sim Lian through their JV company (JVCo).
The freehold 27-storey office building is located within the financial core of Sydney’s central business district (CBD) and next to the newly-opened Martin Place railway station. The building, which was refurbished in 2021, has a net lettable area (NLA) of 12,418 sqm (133,666.24 sq ft) and an occupancy of 85%. The property’s weighted average lease to expiry (WALE) is about three years.
Of the total consideration amount, Metro will contribute A$30.8 million to the investment. The sum will be funded mainly from internal cash sources and external borrowings, according to Metro's Oct 9 statement.
Upon the completion of the acquisition, Metro and Sim Lian’s portfolio will have a total appraised value of A$1.38 billion comprising 18 freehold properties made up of five office buildings and 13 retail centres. The portfolio will have a total NLA of 176,227 sqm in Australia’s New South Wales, Victoria, Queensland and Western Australia. The portfolio currently has 17 freehold properties comprising four office buildings and 13 retail centres with an occupancy rate of 94.1%. Its portfolio WALE is at 5.6 years as at March 31.
Yip Hoong Mun, Metro’s CEO and executive director, says: “This is a rare opportunity to acquire a freehold prime office property within the highly sought-after core precinct of Sydney’s CBD which continues to benefit from flight-to-location and flight-to-quality trends.”
He adds: “The acquisition enhances our portfolio in Australia and deepens our strategic partnership with Sim Lian.”
Shares in Metro Holdings M01 closed flat at 47.5 cents on Oct 9.
