Australian commercial property acquired by UOL for $153 million

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Australian commercial property acquired by UOL Group in attempt to diversify in new market.

UOL Group Limited announced on 6 Dec that it had acquired an Australian commercial property at 72 Christie Street, St Leonards, Sydney for A$154,519,044 (approximately S$153 million). The size and scale of the lobby of 72 Christie Street was said to be evident with double height void and balcony areas. All floors have outstanding levels of natural light. Levels 4,5,6 have large terrace balconies with city views.

The commercial Australian property is an A-grade, eight-storey office building with basement car parking for 228 vehicles; it sits on a 2,815 sqm site. The Australian commercial property was touted as a truly unique commercial building offering a campus style office environment with floorplates up to 1,562m² and large terrace style balcony areas.

72 Christie Street was marketed as being an excellent opportunity to ‘brand your company’, with building naming and sky signage rights available. The modern complex features two street frontages and multiple pedestrian access points. The building currently offers a vertical connection between levels 3 & 4 and includes a quality existing fitout with a creative look and feel.

Located within a short walk to St Leonards Railway & Forum complex, the Australian commercial property benefits from immediate pedestrian access to a multitude of retail facilities and transport links including the Crows Nest café and restaurant precinct.

Australian commercial property
image credit: Real Commercial

The Australian commercial property is only 2km from North Sydney CBD, 10km From the Sydney CBD and 18km from the Sydney Airport.

Transport access for staff is well serviced given the property is within a 5 minute walk to the St Leonards Forum transport facility including bus and rail services.

UOL acquired the Australian commercial property through its indirect wholly-owned subsidiary, Success Venture (CS) Pty Ltd (“SVCS”). SVCS entered into a sale and purchase agreement (“SPA”) with Proprium Capital Partners (Australia) Pty Ltd as trustee for the Linford Hold Trust to acquire all interest in the Australian commercial property. UOL said that its acquisition of the Australian commercial property was subject to the usual post-completion adjustments.

SVCS is incorporated in Australia, and is 100% owned by UOL Investments (Australia) Pte. Ltd., the Company’s wholly-owned subsidiary incorporated in Singapore. SVCS’s principal activity is that of property investment.

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The Australian commercial property is 100 per cent tenanted with the lease expiring in 2028.

UOL said that the Purchase Price was arrived at on a willing-buyer and willing-seller basis taking into consideration various commercial factors, including the location and potential of the Property and prevailing market conditions.

A deposit being ten per cent (10%) of the Purchase Price was paid on signing of the SPA. The balance of the Purchase Price will be payable on completion, which is currently scheduled for 20 December 2018, subject to satisfaction of conditions.

UOL said that the acquisition would be financed by internal resources and external borrowings and is not expected to have a material impact on the Group’s net tangible assets or earnings per share for the financial year ending 31 December 2018. UOL added that the acquisition of the Australian commercial property is in line with the Group’s plan to diversify its presence in Australia and to strengthen recurring income streams.

The Australian commercial property located at 72 Christie Street, St Leonards, Sydney Australia, NSW 2065 has got a freehold tenure. The site area is approximately 2,815 sq m. The Australian commercial property is a 8-storey office building with 4-storey basement parking. Net Lettable Area for the property is approximately 11,259 sq m.

The property has 300 – 3,000sqm of A Grade Office Space with Large Terrace Balconies with City views. It also has 220 security car spaces and interconnective stairs between floors with existing high quality fitout. The building last traded at A$76 million in 2017. This sale was reportedly at an initial yield of 8.5%.

UOL said that none of the Directors of the Company or any of the controlling shareholders of the Company represented on the Board of the Company has any interest, direct or indirect, in the acquisition of the Property.

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DBS Equity Research said that UOL’s acquisition of the Australian commercial property marked the beginning for the firm’s expansion and diversification in the new market. Noting that the acquisition was in accordance to UOL’s target to boost its recurring income amidst the weakening of sentiments on Singapore property, DBS Equity Research said:

“Although UOL is one of the proxies to Singapore property, we believe the company may be less impacted as being the earliest to land bank at a lower price would offer more room in pricing its properties. In addition, upward trends in office rents and hotel RevPAR bode well for UOL’s office and hotel investment properties.”

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