Keppel pays Goodman $306m for Pinnacle Office Park

The asset includes two modern offices and a smaller building with development upside.

Keppel REIT is paying $306 million for a modern and near fully occupied commercial investment in Sydney’s north west.

Pinnacle Office Park, with two mid-rise, A-grade offices and a shorter building with development upside, is trading on a 5.25 per cent initial passing yield.

Goodman Group is the vendor.

The asset is in Macquarie Park, about 13 kilometres north west of Sydney, close to the suburb’s train station, bus interchange and retail centre.

Pinnacle Office Park

On the north west corner of Epping and Lane Cove roads, the nine and eight level commercial buildings go by the address of 4 Drake Avenue while the smaller structure is 6 Griffnock Ave.

The investment contains about 35,132 square metres of lettable area, 96.3 per cent of which is occupied.

Major tenants Aristocrat and Konica Minolta have naming rights. Coles also rents there.

The Weighted Average Lease Expiry is 4.8 years.

Pinnacle is designed with a childcare centre, gym, café and end-of-trip facilities, too.

Keppel REIT chief executive officer Paul Tham said with the purchase, it is exposed to a key metropolitan office market, considered New South Wales’ second biggest (story continues below).

Keppel now controls 10 assets worth $8.25b

“In the wake of COVID-19, we believe demand in Australia for quality and well-networked metropolitan locations will increase as more companies seek cost-effective solutions,” the executive added.

Following Pinnacle settlement, the fund’s portfolio will be worth $8.25 billion and include full or part ownership in 10 offices with a total of about 280,000 sqm of area.

Six of its properties are in Australia, with one in South Korea and the balance in Singapore, where it is headquartered.

The portfolio WALE will be 6.9 years.

The Macquarie Park property is its fund’s first commercial investment not to be high rise.

Goodman’s assets tally about $51.6b.

It separately controls a global development pipeline of 46 projects worth set to surpass $7b in value next year.

In June the landlord announced it would build Amazon a 200,000 sqm distribution centre in Sydney’s west.

The modern offices are 96.3 per cent occupied.
Pinnacle Office Park’s end-of-trip facilities.
The asset is about 13 kilometres north west of Sydney.
Pinnacle Office Park contains just over 35,000 square metres of lettable area.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of