Ascendas REIT buys Melbourne office building for $103.3m

Nissan Motor is one of the key tenants for the building’s space.

Ascendas REIT bought a suburban office building in Melbourne, Australia for $103.3m (A$110.9m) from ESR FPA (Wellington Road), an announcement revealed.

Net property income (NPI) yield for the first year is said to be approximately 5.8% and 5.7% pre-transaction costs and post-transaction costs, respectively.

Also read: Ascendas REIT NPI up 11.5% in Q1

It is located at 254 Wellington Road, within the Monash Technology Precinct in Melbourne, and has 65% of the space pre-committed for 10 years.

The property is expected to be completed in Q2 2020. Automotive company Nissan Motor (Australia) has already agreed to a 10-year lease for 65.2% of the space. This lease has a built-in rent escalation of 3% per annum.

This is the REIT’s fourth fourth suburban office property in Australia.

With the transaction, the REIT now owns 97 properties in Singapore, 36 properties in Australia and 38 properties in the United Kingdom. The Australian portfolio’s pro forma weighted average lease term to expiry is expected to improve to 4.5 years from 4.3 years as at 30 June.