Link Real Estate Investment Trust agreed to purchase an office building in Sydney's central business district from The Blackstone Group Inc.-managed funds for A$683 million.
Additionally, the Hong Kong-listed trust is also buying a nominal portion in the freehold site of the same 10-story commercial property at 100 Market St. for A$3.1 million.
The building with a leasehold term of 299 years until June 26, 2318, forms part of an integrated development in the city along with the Westfield Sydney Shopping Centre, the Sydney Tower and the office buildings at 77 Castlereagh St. and 85 Castlereagh St. It is fully leased to tenants including a Commonwealth government body and a sovereign wealth fund, according to a news release.
Completion of the transaction is subject to various conditions including the approval of Australia's Foreign Investment Review Board.
Link REIT CEO George Hongchoy said the deal reflecting a 3.9% net yield marks the property trust's maiden investment outside China and is part of its strategy to diversify its portfolio, The Australian Financial Review reported.
The Dec. 19 report added that Asia's largest REIT will continue to engage Scentre Group as the manager of the 28,385-square-meter property following the settlement of the purchase.