Straits Trading to acquire two Australia office buildings for A$150M

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The Straits Trading Co. has entered into deals to acquire two Australian office properties located in Docklands, Victoria, from Digital Harbour Holdings for A$150 million, or around S$143.9 million, the company said in a filing to SGX Friday. 

The company said the acquisition, made via Straits Real Estate (SRE), was in line with its strategy of redeploying capital from the existing portfolio of high quality, low-yielding investment properties into potentially higher yielding real estate.

“With the transaction and the recent GBP60 million (S$108.6 million) capital committed in October 2021 for warehouse retail parks in the United Kingdom, SRE continues its strategy to invest in assets anchored by strong credit tenants while at the same time offering strong potential for capital appreciation in an expectant post-pandemic environment,” Straits Trading said in the statement.

Boosting AUM

The strategy is expected to boost SRE’s assets under management to S$3.5 billion over the next few years from S$2.3 billion in December, the filing said.

Straits Trading said it would fund the latest acquisition with internal resources and bank borrowings. 

Docklands is adjacent to the Melbourne central business district, the filing said.

The first property is 1010 La Trobe Street, a nine-storey freehold grade-A office building, which is currently fully occupied with the Department of Home Affairs and Victoria Rail Track as key tenants, the filing said.

The second property is 192 Harbour Esplanade, or the Innovation Building, which is a five-storey freehold grade-A office building locate adjacent to 1010 La Trobe, and which is majority occupied by Australian wholesale broadband network provider National Broadband Network Co., the filing said. 

The acquisition includes 163 parking bays located in an adjacent property at 1000 La Trobe Street, the filing said.

Confidence in recovery

“Despite lockdowns and restrictions on workplaces in the past year, the transaction is in line with the group’s business expansion plans and is reflective of SRE’s confidence in post-Covid recovery of Melbourne commercial real estate,” the company said.

“In addition to strong recurring income, the properties present value-add opportunities including a planned upgrading at 1010 La Trobe,” the company added.

The investment will be via CH Holdings Unit Trust, a subsidiary of Straits Trading’s wholly owned subsidiary Straits Real Estate (SRE), the filing said.

 

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