Optus has signed a 12 year lease renewal for its landmark campus-style headquarters in Sydney’s north.
The landlords, ASX-listed Stockland and joint venture partner, AIMS APAC REIT (AA REIT), which is listed on the Singapore Exchange, will undertake property upgrade works, as part of the deal.
The Macquarie Park campus in North Ryde, known as Optus Centre, includes six low-rise A-grade buildings containing a total office area of 84,194 square metres.
The telecommunication giant agreed in 2005 to move to what would be a purpose-built workplace.
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 lease, the Macquarie Park property will provide an estimated net income of A$28.3 million in the first year (so about $336 per sqm, per annum).
The average net property income over the 12 years will be $36.5 million (or $434 per sqm/pa).
The landlords currently value the asset, 1-5 Lyonpark Road, 15 kilometres from the CBD, at about $240 million.
On 7.6 hectares, Optus’ headquarters also includes retail, a gym, childcare centre, food court and parking for 2100 vehicles.
Optus moved into the complex 12 years ago.
In 2031, it will be offered the option to stay on for up to another 10 years.
The business park is 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 Optus’ 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 currently has a low office vacancy rate of 4.9 per cent, the landlord said.
Taking into account the new Optus tenancy, the WALE today increase to 13.6 years.
This compares to a 2.75-year WALE at 30 September, 2019.