STARHILL Global Reit announced on Monday it is looking to buy a freehold property at 14-38 Rundle Mall, Adelaide, South Australia (Myer Centre Adelaide) for A$288 million (S$302.4 million) in cash.
It entered into the conditional sale-and-purchase agreement on Monday.
Myer Centre Adelaide, located in the city's retail CBD core, comprises a retail centre with almost 620,000 square feet of retail space, three office buildings occupying 98,000 square feet and four basement levels providing 467 carpark lots.
Based on the proposed price, this acquisition will give a yield of 6.6 per cent and is expected to be about 2.8 per cent distribution per unit (DPU) accretive on a pro forma historical basis.
This is assuming that it is funded by internal working capital and debt (about A$145 million and S$150 million term loans).
The acquisition is expected to be completed in the quarter ending June 30, 2015, and will be subject to the approval of the Australian Foreign Investment Review Board.
It will be funded by a combination of internal working capital and external borrowings (in Australian dollars and Singapore dollars).
This will raise the Reit's gearing from 28.6 per cent (as at end-2014) to 35.3 per cent. The purchase price is equal to the independent valuation conducted on March 26, 2015.
Shares of Starhill Global Reit ended flat at S$0.865 on Monday - a one-year high.