Landlords Stockland and Singapore-listed AIMS APAC REIT have convinced telco Optus to renew its lease at its Macquarie Park business campus in Sydney’s north for another 12 years.
Optus has been a tenant at the A-grade office building at 1-5 Lyonpark Road, also known as Optus Centre, for 12 years.
The new lease will improve the weighted average lease expiry at the property to 13.6 years, compared with 2.75 years as of September.
Based on an agreement, the master lease has an annual rental escalation of 3.25 per cent on face rent, and two, five-year options to extend the lease after the initial term.
The centre, which offers 84,194sq m of office space across six low-rise building and 2,100 car parking spaces, sits over 7.6 hectares with a book value of approximately $240 million.
Stockland, which has seen its popular tech-centric Macquarie Park precinct hit a vacancy rate of 4.9 per cent, has committed to further upgrading the facilities including delivering end-of-trip facilities and new roads.
“Our development plans for this campus are consistent with our strategy to upweight our logistics and workplace exposure, optimise security holder returns and ensure we have long term options in the growing Macquarie Park precinct,” Stockland managing director Mark Steinert said.
The company’s chief executive commercial property, Louise Mason, said it would work directly with Optus to oversee the upgrades.
“This further commitment to Macquarie Park is in line with our strategy to grow our workplace and logistics weighting through a strong focus on upgrading existing properties and development opportunities.”
The renewal for Singapore-listed AIMS APAC REIT marks a significant milestone, with Optus reportedly its largest tenant contributing to 12.3 per cent of its gross rental income.
The Optus Centre represents 14.7 per cent of the REIT’s total portfolio valuation and accounted for 6.4 per cent of the portfolio’s net lettable area.
“The new agreement for lease arrangement and asset enhancement initiative will significantly enhance the quality and value of our Optus Centre property in a market currently experiencing limited supply of quality business park assets,” AIMS APAC REIT chief executive Koh Wee Lih said.
Upon the commencement of the new lease, the property will provide an estimated net property income of $28.3 million in the first year, with average net property income of $36.5 million over the 12-year lease term, after taking into account rental escalation.