Metro And Sim Lian Jv Acquire Sydney Office Building A1964 Mil
Metro Holdings and Sim Lian Group, both listed on the Mainboard, have announced their joint acquisition of a freehold office building in Sydney, Australia. The property, located at 1 Castlereagh Street, was purchased for A$196.4 million ($172.3 million). This 27-storey building features retail space on the ground level and is situated in the financial hub of Sydney’s Central Business District (CBD), right next to the newly opened Martin Place railway station. Recently refurbished in 2021, the building boasts an impressive NABERS (National Australian Built Environment Rating System) rating of 4 stars. Its regular and column-free floor plates allow for flexible subdivision to cater to the needs of different users.
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1 Castlereagh Street offers a net lettable area (NLA) of 12,418 sqm (133,667 sq ft) and currently has an occupancy rate of 85%. The weighted average lease expiry (WALE) by income is approximately three years. According to Metro Group CEO Yip Hoong Mun, “This is a rare opportunity to acquire a prime, freehold office property in the highly sought-after core precinct of Sydney’s CBD, benefiting from the ongoing flight-to-location and flight-to-quality trends.”
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This latest purchase marks the 18th property acquisition for the joint venture partners, and their fifth office asset in Australia. As per the joint venture terms, Sim Lian holds a 70% stake, while Metro holds the remaining 30%. Metro’s capital commitment for this investment is A$30.8 million, which will be financed mostly through internal cash reserves and external borrowings.
The joint portfolio currently consists of 17 freehold properties, with an average occupancy rate of 94.1%, and a WALE of about 5.6 years as of March 31. With the addition of the new acquisition, the portfolio will now comprise 18 assets, including five office buildings and 13 retail centres located in New South Wales, Victoria, Queensland, and Western Australia. The total appraised value of the joint portfolio will be A$1.374 billion ($1.206 billion), with a total NLA of 176,227 sqm (about 1.9 million sq ft).
