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INVESTEC Australia Property Fund (IAPF) has acquired its first Sydney property, after purchasing a $38.9 million office building in the city.
The Bank of Queensland owned fund is scheduled to settle the deal on March 31, lifting its total property portfolio to $328 million.
The 11,610sqm office building is located in Norwest Business Park at Baulkham Hills, which is set to benefit from the North West Rail Link due for completion in 2018.
The building is 85 per cent leased, while the annualised property yield on a fully leased basis would be 9.46 per cent.
IAPF CEO Graeme Katz says the acquisition is expected to drive growth for the fund.
"We are pleased to make the first office acquisition for the fund in Sydney," Katz says.
"Confidence appears to be growing in the NSW economy and the acquisition increases the fund's overall exposure to this market.
"Again, the acquisition aligns well with the fund's strategy of investing in well-located, high quality assets."
Katz says the acquisition is accretive to the fund and represents an "attractive" spread over the fund's borrowing costs.
The weighted average lease expiry is five and a half years, with tenants including Clarendon Homes, Novo Nordisk, Bosch and PricewaterhouseCoopers.
IAPF is listed on the Johannesburg Stock Exchange.
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