Summary
Acquired by BHP in conjunction with their long term investment partners, Milroy Holdings, BHP’s desire to acquire this asset was due to its very under rented nature.
Unconditionally purchased following a competitive bidding process, it is BHP’s intention to action the rent review and dispose of the asset thereafter.
Business Case
STRENGTHS
- Long unexpired lease
- Rent review within 12 months
- ERV significantly greater than the passing rent
OPPORTUNITIES
- To secure a significant uplift in the passing rent at review
- To sell a 15 year unbroken income stream following settlement of the rent review
WEAKNESSES
- Financial performance solely dependant on the result of the rent review
- Significant competition during the acquisition had driven up the purchase price
THREATS
- Financial performance dependant on rent review settlement
- Exit yield sensitive to long term money rates