Positive rent reviews & solid leasing for MOF

MACQUARIE Office Trust has ridden through challenging capital market conditions to record a solid three months quarter to March 31.

The trust has leased 46,288 sqm and achieved an average rent increase of 4% representing $3.1 million, across its portfolio.

Chief executive Adrian Taylor was pleased with the strong results that have been achieved over the past three months, reflecting the high quality of assets in the portfolio.

“The portfolio remains well leased to a diverse customer base and the proactive asset management approach of the teams in Australia, Chicago, Tokyo and London continue to work to secure long term, stable revenue opportunities for the trust,” he added.

The trust’s Australian portfolio remains 100% leased after signing 14,883 sqm of space and terms agreed for a further 9,282 sqm through forward leasing commitments to new, existing and expanding customers.

The key leasing transactions include 3,986 sqm at Goulburn Street in Sydney’s CBD, resulting in an increase in occupancy levels from 86% to 99%.

In addition, Media Communications, a subsidiary of the global media group, Young & Rubicam, has signed a five year renewal over 3,496 sqm at The Denison in North Sydney. The new rent is 6.5% above the prior rent and takes the weighted average lease expiry for the property to four years.

The United States portfolio leased over 48,780 sq ft, with terms agreed over a further 60,838 sq ft, with expansions of existing customers representing a significant proportion.

The European portfolio, leasing terms were agreed over 11,300 sqm including 3,664 sqm under letters of intent. The portfolio remains 100% income producing.

And the Japanese portfolio, terms have been agreed over 642 sqm or 10% of the Japanese portfolio during the quarter. The new lease terms reflect an average increase of 25% over prior rents resulting in 96% occupancy.

During the quarter, rent reviews resulted in a weighted average increase of 4% over the prior rent and $3.1 million of additional annual income.

The Australian portfolio rent review of over 68,954 sqm achieved an average increase of 4%, whilst reviews settled in the US portfolio over an area of 1.19 million sq ft, delivered an average 5% increase.

Taylor said over the next four years, on average, less than 10% of leases will expire.

“Tenant retention remains a key priority for the trust, particularly in the current environment and management’s active management approach continues to attract new customers and retain existing tenants on long-term lease terms across the portfolio,” Taylor concluded.

Australian Property Journal