Investec Australia Property Fund pays R249m for Canberra building
Investec Australia Property Fund CEO, Graeme Katz said the addition of the Manning Clarke building in Canberra to the Fund, aligns well to our strategy of investing in high-quality office properties situated in key metropolitan areas.
INVESTEC Australia Property Fund (IAPF), a division of Investec Bank (Australia) Limited, has acquired an A-grade office building in Canberra leased to the Commonwealth of Australia Dept. of Human Services for R249m (AUD25.8m).
IAPF CEO Graeme Katz said the addition of the Manning Clarke building to the Fund, aligns well to our strategy of investing in high-quality office properties situated in key metropolitan areas.
The property has a 10-year lease expiring in February 2023 at a weighted average annual office rent of AUD414m2, and has two further four year options with annual contracted growth of 3.5%.
The acquisition was funded through existing debt facilities which saw the Fund’s gearing rise from 14.4% to 26.8%. The debt has been 100% hedged at an all-in rate of 4.70% in line with the Fund’s hedging policy.
The Manning Clarke building is a single tenanted four level building with a net lettable area of 5,403m2 which recently underwent a significant upgrade and refurbishment. It also includes 158 car parks within the total 9,458m2 site area.
Commenting on the Canberra office market Katz said: “The building is located in the Tuggeranong Town Centre where the economic viability is underpinned by the presence of various government departments, with limited examples of transference. There is close to 0% vacancy for A and B-grade office space and the Department of Human Services leases 85,000m2 of the total of 150,000m2 office space in that market.”
This acquisition marks IAPF’s second purchase since listing on the Johannesburg Stock Exchange (“JSE”) late last year. The portfolio now boasts six industrial and four office properties, all located in established commercial precincts within major metropolitan areas.
The acquisition is effective 15 May 2014 with no conditions precedent attached.
IAPF was listed on the JSE in October 2013 under the Real Estate Holdings and Development sector.
