Optus has signed a 12 year lease renewal for its landmark campus-style headquarters in Sydney’s north.
Landlords Stockland with joint venture partner AIMS APAC REIT (AA REIT) will undertake a major property upgrade, as part of the deal.
The Macquarie Park campus, known as the Optus Centre, includes six low-rise A-grade buildings containing a total office area of 84,194 square metres.
The occupier agreed in 2005 to move in; the workplace was purpose-built.
Then – it was Australia’s single largest office lease deal.
Now, it ranks second to Commonwealth Bank of Australia’s 2015 commitment for 93,000 sqm at Mirvac’s Australian Technology Park, a workplace due for completion next year.
AA REIT said that following the Optus commitment, its Macquarie Park asset will provide an estimated first year net income of A$28.3 million (c$336 per sqm, per annum).
The average net property income over the lease term will be $36.5 million (or $434 per sqm/pa), it added.
The landlords value the asset, 1-5 Lyonpark Road, 15 north west of Sydney, at $240m.
On 7.6 hectares, Optus Centre also includes shops, a gym, childcare centre, food court and parking for 2100 vehicles (story continues below).
In 2031, it will be offered the option to renew for 10 years.
Business park set for a renovation
The landlords plan to renovate the Optus complex with new end-of-trip facilities, access roads, drop off areas, bathroom upgrades and building management systems.
A pedestrian link from the car park will also be developed.
Stockland managing director and chief executive officer, Mark Steinert, described the lease renewal as “an excellent outcome and accretive for Stockland securityholders” as it “up-weighted and consolidated our direct exposure to an A-Grade office asset with a long weighted average lease expiry [WALE] in one of Sydney’s major business centres”.
“Our development plans for this campus are consistent with our strategy to upweight our logistics and workplace exposure, optimise security holder returns and ensure we have long term options in the growing Macquarie Park precinct”.
Macquarie Park has a low office vacancy rate of 4.9pc, the executive said.
Taking into account the latest Optus agreement, the WALE increases to 13.6 years.
This compares to 2.75-years at 30 September, 2019.