SPH REIT acquires 85 percent stake in Australian shopping center for US$124.5 million

Fri Dec 21, 2018 - 4:18am GMT+0000
SPH Reit

SPH Reit

21/12/2018 – SPH Reit Management, a real estate investment trust based in Singapore is planning to acquire an 85 percent stake in a shopping center south of Sydney for A$175.1 million (about US$$124.5 million).

The proposed acquisition will be made through Moelis Figtree Holding Trust (a wholly owned joint venture between SPH Reit and entities managed by Moelis Australia, an ASX-listed financial services group) from Swordfish Australian Mid TC.

This will mark SPH Reit’s first investment overseas, which will be be financed through a combination of debt and internal sources.

Figtree Grove Shopping Center is located about 3.7 km southwest of the Wollongong and 71 km southwest of Sydney. It occupies a total gross lettable area of 21,984 square meters with 940 carpark spaces, a 24-hour Kmart, Coles and Woolworths supermarkets as well as 72 speciality stores, among other shops and services.

“The acquisition of Figtree Grove Shopping Center is a strategic fit with SPH REIT’s portfolio of quality assets and in-line with our strategy to expand our footprint into Australia,” said SPH REIT chief executive Susan Leng.

“With a WALE of 5.4 years by income and built-in rental escalations, the acquisition will provide stable and growing income to our unit holders,” she added.

The mall currently holds an occupancy rate of 98.5 percent and records total retail sales of A$10,551 per square meter (about US$7507), that is 47.7 percent above benchmark for malls in the same category.

Chris Monaghan, the Managing Director and Head of Real Estate Asset Management at Moelis Australia also comments, “SPH REIT’s investment requirements aligned well with our strategy of identifying and acquiring strong performing Australian shopping centers with sound trade area demographics and good growth prospects.”

On acquisition, the property is expected to generate a net property income yield of about 5.7 percent after taking into account the transaction costs.

The deal is conditional on the necessary approvals being granted by the relevant authorities. SPH Reit is sponsored by Singapore Press Holdings, which owns The Business Times.