Aspen finalises $117m finance facility

Developer Aspen Group says it has found a joint venture partner for the $190 million Australian Tax Office building in Adelaide, after finalising funding arrangements with Telstra Super.

Under agreements announced today, Telstra Super will provide Aspen with a construction loan of up to $117.6 million, to be available from September.

Telstra Super will also invest $34 million to take a 50 per cent interest in the 12-26 Franklin Street Property Trust, for which Aspen's part-owned Development Fund No 1 is developing the building.

"We are delighted with Telstra Super's commitment to the development and long-term co-ownership of this landmark office project in the Adelaide CBD, with both parties attracted to the location, high quality tenancy profile and long term cash flow of the asset," Aspen managing director Gavin Hawkins said.

"The joint venture with Telstra Super results in a more appropriate strategic weighting of our property portfolio, as well as an opportunity to extend our existing property funds management relationships in the wholesale investor sector.

The 36,700 square metre ATO building is currently 33 per cent complete, and is on schedule for completion in October 2012.

Aspen said 98.5 per cent of the net lettable area was already pre-leased, by the Australian Tax Office and Australia Post.

The group is expecting it will generate a net operating income of $7.2 million, with an initial yield of 7.8 per cent.

At 9:54AM (WST) Aspen shares were down half a cent, trading at 43 cents.