MA Financial, Keppel REIT acquire Top Ryde City Shopping Centre for $525m
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More news: Shares in MA Financial fell in afternoon trade after the asset manager announced it had jointly acquired Top Ryde City Shopping Centre with Singapore Stock Exchange-listed Keppel REIT for $525 million.
At 1:55pm AEDT, shares in MA Financial had slipped 1.2% to $9. The wider financial sector gained 0.35%.
Keppel co-invested 75% of the investment in the centre, with the remainder made up by MA Financial which will have responsibility for all management functions.
MA Financial, Keppel REIT acquire Top Ryde City Shopping Centre for $525m
The news: Asset manager MA Financial and Singapore Stock Exchange-listed Keppel REIT have jointly acquired Top Ryde City Shopping Centre for $525 million.
The numbers: At 11:09am AEDT, shares in MA Financial had slipped 1.3% to $8.98.
The net acquisition price represents a fully leased yield of about 7.2% and is at a 45% discount to the centre’s estimated replacement cost. It is currently 96% occupied, with tenants weighted towards non-discretionary retailers.
Keppel REIT is co-investing 75% in the centre, with the rest of the asset acquired by an MA Financial managed fund. The managed fund is targeting a distribution yield of 8% and a total return of 13% per annum over its forecast five-year term.
The context: Full management functions for the centre will be undertaken by MA Financial. This includes strategic asset management, property management, leasing and development management.
MA Financial said there have only been two 100% interest sales of a Sydney metropolitan regional shopping centre over the last 22 years.
What they said: “We are excited to partner with Keppel REIT to acquire Top Ryde City Shopping Centre on very attractive terms on behalf of our valued stable of investors,” MA Financial head of core real estate Chris Lock said.
“The social infrastructure characteristics of the shipping centre provides a defensive foundation for investor returns at a point of time that we believe the tailwinds for the real estate cycle are very favourable.”
Keppel REIT Management CEO Chua Hsien Yang said this investment marks the property investor’s expansion into the retail sector.
“Underpinned by sustained consumption growth and a rising population, we are confident that this investment will enhance Keppel REIT’s long-term portfolio resilience and overall returns.”
The source: ASX
