UOL-SingLand JV to acquire 50% stake in Sydney commercial building for A$460 million

PROPERTY developers UOL Group and Singapore Land Group (SingLand) are acquiring a 50 per cent interest in a freehold Grade A commercial building in Sydney’s central business district for A$460 million (S$404.7 million). 

This will be done through an 80/20 joint-venture between UOL and SingLand. 

The remaining interest for the property at 388 George Street will be held by an unrelated third party. 

In their respective bourse filings on Friday (Oct 11), the two said the acquisition is in line with plans to diversify and strengthen their income streams, while expanding their presence in Australia. 

The A$460 million price tag was arrived at on a willing-buyer, willing-seller basis taking into account various commercial factors, such as the location and potential of the property, as well as prevailing market conditions, they added. It will be financed by internal resources and external borrowings. 

A deposit of A$23 million, or 5 per cent of the sale price, has been paid.

The balance will be paid upon completion of the deal, which is subject to conditions such as obtaining approvals and agreements from regulatory authorities in Australia, including the Foreign Investment Review Board of Australia. 

The completion is expected to take place within the first half of 2025, said UOL and SingLand. 

Built in the 1970s, 388 George Street comprises a 30-storey commercial building with a two-storey basement parking and five-storey retail and commercial podium building.

It has a site area of around 3,353 square metres (sq m) and a total net lettable area of 41,098 sq m, including 37,444 sq m of office space and 3,654 sq m of retail space. 

The development later completed A$200 million worth of redevelopment works in 2020 to include on-site amenities, such as end-of-trip facilities, a cafe, and a rooftop restaurant and bar. 

As at Sep 30, 2024, the building is fully leased to a “high variety of high-quality” with a weighted average lease expiry by income of around 6.2 years. It is also home to luxury retailer Cartier’s flagship boutique. 

Shares of UOL closed at S$5.40 on Friday, down 0.7 per cent or S$0.04, before the news. SingLand stocks closed at S$1.75, down 0.6 per cent or S$0.01.