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MNACT acquires 50% stake in Seoul office building
MAPLETREE North Asia Commercial Trust (MNACT) has acquired a 50 per cent stake in Pinnacle Gangnam for a price tag of 229.4 billion won (S$276.4 million).
The total acquisition cost for the 20-storey freehold office building in Seoul's Gangnam business district in South Korea, was fully funded by debt, said MNACT. This includes the 50 per cent agreed property value of 226 billion Korean won, the acquisition fee of about S$2.7 million, as well as estimated professional and other transaction fees and expenses of 0.7 billion won.
The acquisition, slated for completion by year- end, is believed to be an "attractive value proposition" in terms of distribution per unit (DPU) accretion and net property income (NPI) yield, said the real estate investment trust (Reit) in a previous announcement.
MNACT's managers said the acquisition is expected to raise the DPU by 0.4 per cent to 7.15 Singapore cents on a pro-forma FY19/20 basis.
Pinnacle Gangnam has a gross floor area of 44,444 sq m. It also has an occupancy rate of 89.6 per cent and a weighted average lease expiry of 2.8 years by monthly gross rental income (GRI) as at end-July.
The building's five largest tenants include Qualcomm, Huvis, JustCo, Ralph Lauren and Echo Marketing, all of which collectively represent 55.4 per cent of the property's monthly GRI as at end-July.
MNACT units closed down S$0.015, or 1.7 per cent, to S$0.87 on Friday prior to the announcement.