Investa Office Fund has agreed a renewal with ANZ Wealth Australia that will see the financial services business remain in the 15,821 square metres it leases at 347 Kent Street for at least another five years.
The ASX-listed fund said late on Wednesday it had reached a heads of agreement with ANZ to continue the lease, which covers 63 per cent of the Sydney building’s net lettable area, after its expiry in January 2019, and also gave ANZ the potential to take an additional 4170 square metres – 17 per cent of office NLA – by May 31 next year.
“Retaining ANZ at 347 Kent Street will be a significant achievement for IOF, reducing potential downtime and providing a significant income stream from the building while it is being repositioned,” IOF fund manager Penny Ransom said. “We are also very pleased to retain ANZ as a valued client within our business.”
Investa said the proposed renewal would cut the fund’s FY19 expiry profile by at least 6 percentage points to 19 per cent, and will increase the fund’s pro-forma June 30, 2017, weighted average lease expiry by at least 0.4 years to 5.5 years. The proposed renewal to ANZ is not expected to have any impact on FY18 guidance.
Last year, ANZ rival NAB agreed to a 12-year lease with Brookfield Property Partners to become anchor tenant at Brookfield’s Wynyard Place development in Sydney’s Carrington Street. It will occupy 31,000 square metres.
Investa said planned refurbishment works at 347 Kent Street remained on track and would include an upgrade of mechanical services, the entrance foyer and end-of-trip facility, as well as the creation of new commercial space in the atrium and an upgrade of level 1, which includes the creation of an outdoor terrace area.
Refurbishment of the office space would be contained to level 1 and any remaining floors not subject to ANZ’s renewal, it said. The total project cost estimate has been revised to between $40 million and $45 million, subject to ANZ’s final space requirements.
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