On 8 Oct, Suntec REIT announced for the proposed acquisition of 50.0% interest in Nova North, Nova South and The Nova Building. These Nova properties are located in Victoria, West End, London, United Kingdom. Let's review this acquisition section by section:
Lease Profile
This acquisition would improve lease profile where portfolio occupancy, WALE as well as weighted average land lease expiry will be improved.
Debt Profile
This acquisition would be funded by internal resources and borrowing. Gearing would increase to 45.2% and unsecured borrowing % would drop. The weighted cost of debt for this acquisition would be 2.58%, slightly lower than the latest cost of debt.
Diversification Profile
Diversification would be improved where top geographical, top property, top tenant and top 10 tenants contributions would be lowered. However, Suntec REIT would be less diversified in terms of sector, which is heavily focused on the office sector after the acquisition.
Financial Metrics
This acquisition would increase DPU by 0.36 cents per year. It is 4.9% accretive IF based on 1H 2020 DPU before 10% retention....