- Asset acquired for $165M before acquisition costs
- Was constructed in 2011, and has a 6 star Green star rating
- Is 99.7% occupied, with a WALE of 9.5 years
Growthpoint Properties Australia (ASX: GOZ) announced this morning the exchange of contracts with Dandenong GSB Pty Ltd to acquire an A-grade office asset.
Located at 165-169 Thomas Street, Dandenong, Victoria, the properties was acquired by GOZ for $165 million, net sale price excluding acquisition costs.
The property was constructed just over a decade ago in 2011, and includes 15,071 square metres of ground-floor retail, seven floors of A-grade office space, and secure basement parking for 204 vehicles. It also has a 5.5 star NABERS energy rating, 6 star NABERS water rating and 6 star Green star rating.
Half an hour from the Melbourne CBD, the asset is approximately 400 metres from the Dandenong railway station and regional shopping centre Dandenong Plaza.
The asset is 99.7% occupied, including 96.8% leased to the Victorian State Government on behalf of the Minister for Finance, with a long weighted average lease expiry (WALE) of 9.5 years, at 1 June 2022.
The Victorian State Government lease provides fixed annual 3.5% rent reviews. The remaining space is leased to eight ground floor retail businesses. The property is being acquired on a 5.3% initial income yield.
The acquisition will be funded using debt and is expected to be accretive to FY23 FFO. After settlement, Growthpoint expects to have approximately $184 million of undrawn debt facilities and gearing of approximately 33.9%.
Timothy Collyer, Managing Director of Growthpoint, said, “We are pleased to acquire this high-quality, long-WALE asset with high green credentials that is centrally located in Dandenong, the hub of Melbourne’s growing south-east region.”
“The acquisition further increases Growthpoint’s exposure to government covenants in strategic urban locations and is a great addition to our portfolio, supporting our strategy to maintain a portfolio of modern, high-quality resilient assets which meet our tenants’ needs now and into the future.”
Timothy Collyer, Managing Director of Growthpoint
“We are confident in the market’s long-term outlook with recent urban renewal investment supported by further Government investment initiatives.
“The State Government ‘Revitalising Central Dandenong’ initiative is expected to attract over $1 billion in private sector investment.”
“In addition, the Federal Government’s $15 billion infrastructure investment in the south-east will further improve transport connections.
“This includes the Port of Hastings Inland Port Facilities with an associated intermodal facility and freight rail connection from Melbourne to Dandenong South and an upgrade to the Cranbourne-Packenham rail line which will reduce travel times and provide a direct link to Melbourne airport through the Metro tunnel.”