Aspen pays $31m for NSW office

Western Australian property investor Aspen Group Ltd has purchased a Sydney office property for $31 million, a price slightly above its stated $5 million to $30 million range as it seeks grow its fund by $250 million.

ACQUISITION OF NORTH SYDNEY OFFICE BY ASPEN DIVERSIFIED PROPERTY FUND Aspen Group (ASX:APZ) is pleased to announce that the Aspen Diversified Property Fund (Aspen Diversified) has agreed to purchase an office property in North Sydney for $31.0 million. The property at 80 Mount Street, North Sydney is a substantial freestanding office tower strategically positioned on a highly visible corner in the heart of the North Sydney central business district. The property provides a total net lettable area of 6,269 square metres comprising 14 levels of office accommodation and ground floor retail areas. In addition there are three levels of basement parking. Aspen Diversified is an unlisted commercial property fund launched in April 2005 and managed by Aspen Funds Management Limited, a wholly owned subsidiary of the Aspen Group. The acquisition provides further income growth to Aspen's funds management division, through acquisition fees, and increased annual management fees which are based on the Fund's assets under management. Aspen Group Managing Director Angelo Del Borrello said the proposed acquisition was in keeping with the strategic direction of the Fund and will see gross assets for Aspen Diversified increase to $80 million represented by seven properties. "We are seeking to grow the Fund to $250 million in assets focussing on properties in the $5 million to $30 million range, an area which Aspen believes offers good opportunities for investors." said Mr Del Borrello. The North Sydney property provides the Fund with exposure to a strengthening property market which has seen vacancy rates fall from 13.4% to 11.2% during 2005. The multi-tenanted office tower with 31 tenants will show an 8.5% yield on a fully leased basis, an attractive return for a prominent CBD location, and fits well with the active asset management style of Aspen. Diversification is increased with the North Sydney acquisition, with the resulting sector allocation being office 58%, industrial 24%, and retail 18%, and geographic split 59% Western Australia and 41% New South Wales. The proposed acquisition has an expected settlement date of 30 November 2005.