AA REIT's JV clinches another 12-year lease with its master tenant Optus

It will begin July 2021 after upgrade works on Optus Centre Australia.

A joint venture between AIMS APAC REIT (AA REIT) and Australian real estate firm Stockland have clinched another 12-year lease from its master tenant Optus Administration starting July 2021 at the Optus Centre Australia, according to a press release.

The new lease will begin on 1 July 2021 after upgrade works including end-of-trip facilities, new access roads, drop-off areas, a pedestrian link from the car park, upgrades to existing bathrooms and utility infrastructure such as mechanical, electrical and building management systems. The property will remain operational whilst these are carried out.

Based on an agreement they signed, the master lease has an annual rental escalation of 3.25% on face rent, and two, five-year options to extend the lease after the initial term. The net property income (NPI) for the first year of the new lease is estimated at $26.22m (A$28.3m), and the average NPI over the 12-year term is projected around $33.81m (A$36.5m).

Optus Centre is a business park located at Macquarie Park in northern Sydney, New South Wales, Australia, owned through AA REIT’s 49% stake in the Macquarie Park Trust, with its joint venture partner Stockland, owning the remaining 51%.

As of 30 September, the property represented 14.7% of AA REIT’s total portfolio valuation and accounted for 6.4% of the portfolio’s net lettable area. Optus is reportedly AA REIT’s largest tenant, contributing to 12.3% of its gross rental income for Q3.