31 Aug Office Building Acquisition
NZX Announcement Immediate — 31 August 2020
Stride Property Group — Office Building Acquisition
Stride Property Limited (SPL) is pleased to announce that it has entered into an unconditional agreement to acquire an office building at 34 Shortland Street, Auckland for a purchase price of $67.5 million, including an allowance of between $3 million and $3.5 million for building upgrades. The initial passing yield on acquisition, prior to commencement of the works, is 6.3% and is expected to be 6.0% after the capital upgrades. The property has a WALT of 2.7 years. Settlement is expected to occur on 2 September.
The capital works will include a range of upgrades, including to the building’s services and lifts, and are expected to be completed over the next 12 to 18 months.
SPL will acquire the 17 level building with the exception of levels four to seven, which are owned separately. SPL’s ownership will include 8,128 sqm of lettable area and 73 car parks.
The acquisition will be funded through SPL’s available debt facilities, and will take SPL’s loan to value ratio to approximately 28% (Note 1).
Subsequent to this acquisition, SPL’s office portfolio will increase to 46% (+8%) of its directly held portfolio, and 25% (+6%) of its weighted look-through holdings, including its interests in Investore Property Limited, Industre Property Joint Venture and Diversified NZ Property Trust. The proportion of SPL’s office portfolio located in Auckland will grow to 57% (+16%) (Note 1).
Stride Property Group’s Chief Executive, Philip Littlewood, commented “This acquisition furthers our stated strategy of growing our portfolio of commercial office properties. Stride targets buildings where it can add value, such as 34 Shortland Street, and which will have enduring demand. Stride’s head office is currently located in this building and we are pleased to be able to acquire a building that we know well, in a great location and with good amenity.”
- All figures are as at 31 March 2020, on a pro forma basis, assuming the following transactions had completed as at that date: (1) the sale of the three large format retail properties to Investore Property Limited (Investore) which settled on 30 April 2020; (2) the subscription by SPL for $16.5m of additional shares in Investore’s capital raising announced on 29 April 2020; (3) Industre Property Joint Venture had commenced and the committed acquisitions and developments had completed; (4) the committed development by Diversified NZ Property Trust at Queensgate Shopping Centre had completed; and (5) the acquisition of the property at 34 Shortland Street, Auckland.
For further information please contact:
Tim Storey, Chairman, Stride Investment Management Limited / Stride Property Limited
Mobile: 021 633 089 – Email: [email protected]
Philip Littlewood, Chief Executive Officer Stride Investment Management Limited
Mobile: 021 230 3026 – Email: [email protected]
Jennifer Whooley, Chief Financial Officer, Stride Investment Management Limited
Mobile: 021 536 406 – Email: [email protected]
Louise Hill, General Manager Corporate Services, Stride Investment Management Limited
Mobile: 0275 580 033 – Email: [email protected]
A Stapled Security of the Stride Property Group comprises one ordinary share in Stride Property Limited and one ordinary share in Stride Investment Management Limited. Under the terms of the constitution of each company, the shares in each can only be transferred if accompanied by a transfer of the same number of shares in the other.