Singapore-listed Suntec Real Estate Investment Trust and ARA Dunedin Asset Management have completed the acquisition of a 50% stake in the Nova estate in Victoria, SW1, from CPPIB.
The sale price is understood to be £430m, reflecting a 4.75% yield.
The REIT has also appointed ARA Dunedin to manage the assets and represent it as part owner.
The other 50% owner of the Nova estate, which comprises Nova North and Nova South, is Landsec.
The buildings provide 480,292 sq ft of office space to 17 tenants and 78,811 sq ft of food and beverage space to 18 tenants.
The entire joint holding was previously priced at £900m, reflecting a net initial yield of 4.5%.
It is let on a long-term basis with a weighted average lease term to expiry of approximately 11 years.
Chong Kee Hiong, chief executive of ARA Trust Management (Suntec), manager of Suntec REIT, said: “We are pleased to make our first foray into the UK with the acquisition of Nova, which is a strategic fit with Suntec REIT’s existing portfolio of high-quality commercial assets in Singapore and Australia.
“These two premium grade-A office buildings will enhance the resilience, diversification and quality of Suntec REIT’s portfolio. The ARA Dunedin team has contributed to the acquisition with its strong local support and in-depth knowledge of the UK market.”
ARA Dunedin has also completed the acquisition of Bourne Business Park in Addlestone, Surrey, on behalf of Straits Real Estate for £80m, representing a 6% yield. ARA Dunedin will also manage the asset and represent the new owner.
It comprises six office buildings built between 1999 and 2017, totalling approximately 182,364 sq ft of net lettable area. The park is currently 96% let to multiple tenants.
Mark Ebbinghaus, chairman of ARA Dunedin and chief executive of ARA Europe, said: “We are pleased to have been able to assist our clients acquire these resilient assets that generate high quality and sustainable income.
“We remain positive on the office sector as an investment asset class, particularly in key landmark London precincts as well as in well-connected and decentralised regional locations in the UK.”
ARA Dunedin’s founder and chief executive Roun Barry added: “These transactions are testament to the continued attractiveness of the UK as an investment destination.
“While our capital partners remain committed to expanding their UK exposure and our investment pipeline is strong, experience dictates that we must be particularly selective during this stage in the cycle. We expect to be extremely active in targeting the right opportunities over the next 18 months.”
Eastdil Secured advised CPPIB on the sale.
To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette
