Aspen extends Karratha lease with Woodside

Woodside Energy has opted to partially extend a leasing agreement at the Aspen Karratha Village after Aspen agreed to upgrade the facility.

The extended lease is for a period of two years, effective as of January 30 2014, with a further one-year option.

The key commercial terms of the lease extension are that Woodside will downsize to tenant 150 rooms, which represents 83 per cent occupancy of the property, down from the current 100 per cent, while Aspen undertakes property and technology upgrades, estimated to cost $600,000.

The company expects annualised net income from the Aspen Karratha Village to be approximately $3.3 million, assuming only the Woodside tenancy exists.

“This agreement is a major step forward for Aspen,” Aspen chief executive Clem Salwin said.

“We are delighted to have secured repeat business from one of Australia’s largest resources companies, illustrating Aspen’s capacity to deliver on the requirements of our customers in the accommodation sector.

“While there will be a significant decline in net income from this property, this is in line with the very difficult market conditions resulting from the much weaker capital expenditure cycle in the resources sector.

“However, maintaining a solid, high quality income stream from the property is a positive outcome in these market conditions.”

In September, Aspen sold its 45 per cent share in Fern Bay Seaside Village in New South Wales for $17.6 million after it placed its commercial portfolio, including Adelaide Terrace’s Septimus Roe office tower, on the market for $311 million in August in its bid to reduce debt.

Shares in Aspen are level since open, trading at $1.50 per share as of 1.30pm, WST.