Project Overview

Institutional quality project located in one of the most sought after markets in Australia

Location

-        Situated on the eastern fringe of the Parramatta CBD with three street frontages and a light rail station directly opposite. Short walk to major rail and metro stations as well as Sydney’s largest shopping centre.

Development

-        Deicorp owns the site and is developing a mixed use project consisting of ~ 6,000m² of convenience retail and commercial space, basement car parking and ~ 600 residential apartments across two towers (Acacia controls the west residential tower and associated parking)

Apartments

-        All apartments have external balconies, second bathrooms for two and three bedroom apartments and high quality finishes considered to be mid to upper market. Residents will benefit from extensive outdoor communal amenity on level three.

Status

-        The project received development approval in December 2023 following a design competition. Existing building on site have been demolished and initial archaeological work is nearing completion.

Parramatta

Located in the geographic heart of Sydney, Parramatta is considered Sydney’s second CBD. It is well established as a major commercial, employment, residential and cultural hub with strong public transport and other social infrastructure.

Parramatta: A Strategic Growth Centre

-        The “Six Cities Region” masterplan strategy produced by the NSW State Government in 2022 is a 40-year masterplan for Sydney which has Parramatta as one of the most strategically important centres for Sydney’s future.

-        Parramatta is the centre of Western Sydney - which is home to 191,000 businesses and a workforce of nearly one and a half million people, making it the 3rd  largest economy in Australia and the 2nd largest economy in NSW.

-        Parramatta’s population is forecast to grow by 70% to 490,0001 and an extra 113,000 jobs3 are expected to be added to the existing workforce of 145,0003 in the next 15 -20 years. Parramatta is already Australia’s 4th and Sydney’s 2nd largest office market4.

-        Parramatta is ~ 500 metres from the Westmead health precinct (accessible by the light rail) which is projected to generate 50,000 full-time jobs by 2036.

-        The project benefits from excellent transport links via trains, buses, ferries, and the upcoming Parramatta Light Rail and Western Sydney Metro ensuring easy access to surrounding business districts and Sydney CBD.

Target Programme

The transaction has been structured to ensure Deicorp bears all in ground risks such that land settlement does not occur until level 2 podium has been complete (target June 2025), thus significantly de-risking the project for the incoming investor. Furthermore, a substantial amount of pre-sales will be targeted prior to the exercise of the option in November 2025.

­September 23: Commercial Terms Agreed

December 23: Development Application approved

February 24: Execution of binding Option Deed and Development Management Agreement

March 24: Commencement of early works including demolition of existing structures on site and archaeological investigations

November 24: Major excavation works, construction of basement and podium commence

November 25: Call Option Exercise Date

June 26: Completion of basement and podium, and registration of stratum title for the Acacia basement car parking and tower air stratum. Land settlement $100 million. Fund through $140 million begins

June 28: Practical Completion and completion of apartment sale settelements

Transaction and Funding Structure

Acacia has executed binding documents to acquire the completed basement car parking and the west tower air stratum with the associated fund-through development of the tower. The documentation and transaction structure may be amended to achieve a stamp duty efficient transaction whilst maintaining other commercial elements of the deal.

Transaction Documents

-        Put and Call Option Deed

o   Put Option for Deicorp and Call Option for Acacia, covering basement parking and future tower. Acacia has the right to rescind until November 2025.

o   A $5 million deposit via bank guarantee has been issued to secure the contract.

-        Contract for Sale

o   Purchase Price: $100 million, with $10 million deferred by five months.

o   Settlement is dependent on Deicorp delivery legal title for the basement parking and tower air rights - expected in June 2026.

o   Sunset Date: August 2026.

-        Developmnent Management Agreement (DMA)

o   Following completion of the land settlement, the fund-through acquisition of the west residential tower commences under the DMA.

o   Development Price: $140 million fixed; any cost overruns (excluding Acacia instructed variations) are Deicorp’s responsibility.

o   Deicorp Guarantor provides an unconditional guarantee for Deicorp Developer's obligations.

o   Liquidated Damages: $32,500 per day for delays to Practical Completion, subject to approved time extensions.

Funding

-        Acacia has secured an in principle commitment and indicative term sheet from National Australia Bank (NAB) to providing funding upto 70% LTC.

-        It is assumed all costs incurred prior to land settlement will be equity funded.

-        If investor appetite permits, Acacia is also in discussions with potential sub-ordinated debt lenders to provide an additional layer of funding upto 10-15% LTC.