38-sydney-avenue-canberra-google-street-view-screenshot-feature
38 Sydney Avenue is only 500 metres from Parliament House. Image – Google Maps Street View.
  • $73 million acquisition of Canberran office property
  • Located 500 metres from Parliament
  • $50 million raise successful

Yesterday, Irongate Group (ASX: IAP) acquired 38 Sydney Avenue in Canberra.

Purchased from Blackstone Group for $73.75 million, the A-grade office property includes 8,901 square metres of space across four floors.

The building is located 500 metres from the west wing of parliament house, Department of Foreign Affairs, and Manuka Oval.

“The property is being acquired on an initial yield of 5.13%.”

Irongate Group

“The property is 55% leased to the Australian National Audit Office… with 13.5 years remaining on the lease term and annual fixed rent reviews of 3.5%.”

“The balance of the office space (3,920m²) is subject to a 24-month non-refundable gross rent guarantee provided by the vendor, resulting in a WALE for the Property at completion of 8.5 years.”

CEO of Irongate, Graeme Katz, said the Canberran office provided the portfolio certainty despite Covid.

“The Canberra office market proved resilient through the COVID-19 pandemic, underpinned by the government sector. The Property is located 500m from Parliament House in a precinct with A-grade vacancy of less than 1%.”

Graeme Katz, CEO of Irongate

Following the acquisition, the Irongate portfolio WALE has been raised by 0.1 to 4.7 years.

Acquisition impact on portfolio

irongate-acquisition-impact-table
Image – Irongate.

Institutional placement

The raising goal was $50 million, with stapled securities priced at $1.47 each.

To partly fund the acquisition and transaction costs, Irongate said the securities will rank equally with existing IAP stapled securities and will be entitled to the distribution for the six months to 30 September.

Irongate’s pricing for the placement represents a 3.9% discount to the last closing price of $1.53 on Friday, 11 June, and is “fully underwritten by Macquarie Capital and UBS Australia Branch.

Today, the company announced that it has successfully completed the placement through the issue of 34,013,605 stapled securities.

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