Suntec REIT - OCBC Investment 2016-08-08: Proposed acquisition of an interest in Southgate Complex, Melbourne

Suntec REIT - OCBC Investment 2016-08-08: Proposed acquisition of an interest in Southgate Complex, Melbourne SUNTEC REAL ESTATE INV TRUST T82U.SI

Suntec REIT - Proposed acquisition of an interest in Southgate Complex, Melbourne

  • Suntec REIT announced that it has formed a JV (50% indirect interest) which has entered into an agreement to acquire a 50% interest in Southgate Complex from Dexus Southgate Trust. The purchase consideration is A$289m. 
  • Including stamp duties and other fees, the estimated total cost of the acquisition for Suntec REIT works out to be A$154.9m. 
  • In addition, separate put and call option agreements have been entered into with Dexus where the remaining 50% interest in Southgate Complex will be acquired for the same purchase consideration of A$289m. 
  • Southgate Complex is a freehold, mixed-use property located on the waterfront of the Southbank precinct in Melbourne, Australia. It comprisestwo office towers, a three storey retail podium with a total NLA of 820,324 sq ft. Overall committed occupancy rate of the property is 88%, as at 5 Aug 2016, with major tenants including IBM, The Herald and Weekly Times, Commonwealth of Australia, APT, Dairy Australia, City Road Melbourne and LinkedIn. 
  • Suntec REIT intends to finance this acquisition wholly via debt or debt capital market instruments. 
  • We maintain our SELL rating and S$1.54 fair value estimate on Suntec REIT.







Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2016-08-08
OCBC Investment SGX Stock Analyst Report SELL Maintain SELL 1.540 Same 1.540


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