New Acquisition: 54 Wellington St, Collingwood.

 We are pleased to advise that we have exchanged contracts on two transactions which together represent a highly attractive portfolio recycling outcome that strengthens the Fund’s total return profile and enhances portfolio diversification.

Busselton Central has been sold for $74.6 million, consistent with book value, reflecting a 5.6% yield, while 54 Wellington Street, Collingwood has been acquired for $108 million – reflecting an 8.0% yield.

54 Wellington Street is a 15,311 sqm, 6 Star Green Star (As Built and Design) office building completed in 2022, with major tenants including Bank Australia, The Commons, Expression Australia and Launch Housing. The building’s ESG credentials, including a 5 Star NABERS Energy and Water rating, provide a distinct competitive advantage, attracting occupiers across the asset, all of whom are “for purpose” or not-for-profit organisations.

The building has a weighted average lease expiry (WALE) of 4.6 years, providing income visibility over the short to medium term, while also creating potential for income growth over the longer term.

The purchase price represents in excess of a 50% discount to the estimated replacement cost of $220 million and equates to $7,056 per sqm of NLA. This represents a compelling entry basis for a tightly held institutional asset, noting this is the only 100% freehold sale of a 6 Star Green Star office building in Melbourne in more than a decade.

ASA Real Estate Partners is pleased to have executed this portfolio recycling initiative, which underpins the 7.0% distribution yield (fully tax deferred in FY26), and will contribute to the total return target of 10% that we expect will be delivered largely through embedded fixed and inflation-linked income reviews across the portfolio. Further upside could be achieved through lower terminal yields, which can be realised throughout the market cycle.

Upon settlement of the transactions, the ASA Diversified Property Fund will have a weighted average lease expiry profile of 8.6 years, and comprise of 71% convenience retail assets and 30% office assets held at an average cap rate of 6.3%.