REIT Financial News - 19 JUL 2010: K-REIT - ACQUISITION OF THE OFFICE TOWER AT 77 KING STREET, SYDNEY, AUSTRALIA

ACQUISITION OF THE OFFICE TOWER AT 77 KING STREET, SYDNEY, AUSTRALIA. See:

• Announcement

Key Points

• the Reit has entered into a contract with Kingvest Pty Limited for the acquisition of a 100% interest in Lots 1, 3, 4 and 5, 77 King Street, Sydney, Australia.
• 77 King Street is a prime commercial building located in the heart of Sydney’s Central Business District (“CBD”), in close proximity to major CityRail Stations – Wynyard, Martin Place and Town Hall Stations. It has a net lettable area of 170,662 sq ft across 18 levels of Grade A office space and five levels of quality retail space.
• The purchase consideration of the Property is A$120.0 million or approximately S$145.0 million.
• An independent property valuer commissioned by K-REIT Australia to value the Property has valued it at A$120.0 million in the valuation report dated 16 July 2010.
• The FY 2009 pro forma net profit attributable to the Acquisition is approximately A$3.1 million (approximately S$3.7 million ).
• Pro Forma Net Asset Value (“NAV”) will remain the same at S$1.47 before and after the acquisition.
• Pro Forma Distribution per Unit will increase from 5.28 to 5.63 cents after the acquisition based on K-REIT Asia’s DPU for FY 2009, and as if K-REIT Asia had completed the Acquisition on 1 January 2009.
• The Acquisition will be funded by a combination of debt and equity with the proceeds from the rights issue completed by K-REIT Asia in November 2009. 
• K-REIT Asia’s aggregate leverage is expected to increase from 15.2% to 20.4% after the completion of the Acquisition.

Author's Note
Once acquired, this will be the second property of K-Reit in Australia. The last acquisition was a commercial property in Brisbane, Australia. See K-REIT ACQUISITION OF 50% INTEREST IN PRIME COMMERCIAL BUILDING IN BRISBANE, AUSTRALIA.