ASB MAGAZINE: Boardriders has sold its Burleigh Heads Headquarters with the sales and purchase contract recently inked between Singapore based real estate investment trust Aims Apac Reit (AA Reit) and Boardriders subsidiary GSM Rocket Australia to buy the freehold industrial facility on the Gold Coast for a reported $38.46 million. Boardriders announced in November its intentions to sell the company’s Burleigh Heads base with the focus to free up capital to reinvest in its business.Further, Boardriders said it would maintainits occupation of the site under a 12-year lease. Today’s sale price was below market expectations for the former Billabong HQ in Burleigh Heads which market sources expected the price range for the property between the $45 to $50-million price bracket.
The deal amount was arrived at after considering an independent valuation by CBRE Valuations, which put the property at A$38.46 million. After including stamp duty payable and other transaction costs, the total estimated cost of the acquisition is about A$41.5 million.
The property will be leased to GSM Operations for 12 years on a triple net lease basis, which is a lease structure where the master tenant is responsible for outgoings of the property, including repair and maintenance costs, insurance, and taxes, among other things.
According to press reports, the first-year rental from the property is A$3 million, and will increase by 3 per cent a year, with a rent review at midterm of the lease. Under the contract, the GSM Operations also has an option to renew the lease for another five years.
The Acquisition will be AA REIT’s maiden foray into Queensland, Australia and its second property investment in Australia. The Company believes that the outlook for the Gold Coast economy remains positive as the region is currently experiencing growth across key economic factors including strong population growth, investment into major infrastructure developments and an increase in both domestic and offshore tourism into the region.
Sources: The Strait Times & AA Reit Investor Relations
