Investa Office Fund (IOF) has announced the acquisition of 99 Walker Street in North Sydney – a 17,200sqm, 21 level, A-grade office building – for $124.9 million.
Subject to post settlement adjustments for capex and transaction costs, the acquisition will generate a yield of 7.9% on cost and will be accretive to FY14 earnings.
IOF Fund Manager, Toby Phelps, said he is pleased with the acquisition and the value it adds to their portfolio.
“We’re very pleased at the addition of another value-add asset to our portfolio, which reflects our continued commitment to deliver on the strategy of repositioning our portfolio to focus on Australia,” Mr Phelps said.
“Since taking over IOF we’ve acquired over A$800m of value-add and core assets and divested more than A$520m of offshore assets, producing strong earnings accretion and building on our track record of creating high risk adjusted returns of unitholders.”
The commercial office tower also features 1,000 square metres of ground floor retail space, a food court, a large 263 bay car park and views of Sydney Harbour and the CBD.
99 Walker Street currently has seven tenants, including GE Capital Finance and AAMI, and has a weighted average lease expiry of 5.2 years with over 40% of income contracted beyond 2021.
Funding will be from existing debt facilities and pro-forma gearing at settlement will be 29%.
The development was completed in 1988 and is close to North Sydney railway station and bus stops.
Settlement is expected to take place mid-July.