Metro And Sim Lian Jv Acquire Sydney Office Building A1964 Mil
Metro Holdings and Sim Lian Group, two companies listed on the Mainboard, have come together to acquire a freehold office building in Sydney, Australia. The property in question, located at 1 Castlereagh Street, was purchased for A$196.4 million ($172.3 million).
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1 Castlereagh Street is a 27-storey office building with retail space on the ground level. It is conveniently situated next to the newly opened Martin Place railway station in the financial district of Sydney’s CBD. In 2021, the building underwent refurbishment and has achieved a NABERS (National Australian Built Environment Rating System) rating of 4 stars. It boasts spacious and column-free floor plates, which can be divided to cater to the needs of different tenants.
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The property has a net lettable area (NLA) of 12,418 sqm (133,667 sq ft) and an 85% occupancy rate. Its weighted average lease expiry (WALE) by income is approximately three years.
According to Metro Group CEO Yip Hoong Mun, “This is a rare chance to acquire a prime, freehold office property in the highly coveted core precinct of Sydney’s CBD. The area continues to experience a trend of people wanting to relocate to this desirable location, as well as a focus on high-quality properties.”
This latest purchase marks the 18th property acquisition and fifth office asset for the joint venture partners in Australia. Sim Lian holds a 70% stake in the joint venture, with Metro holding the remaining 30%. Metro’s capital commitment for this investment is A$30.8 million, which will be financed primarily through internal cash reserves and external borrowings.
The existing portfolio of 17 freehold properties has an average occupancy rate of 94.1%, and a WALE of 5.6 years as of March 31. With the addition of the new property, the joint venture will have a total of 18 assets, including five office buildings and 13 retail centers located in New South Wales, Victoria, Queensland, and Western Australia. The total appraised value of the joint portfolio will amount to A$1.374 billion ($1.206 billion), with a total NLA of 176,227 sqm (approximately 1.9 million sq ft).