Desane Secures Decade-Long Lease with National Retailer at Leichhardt
Desane Group Holdings has locked in a decade-long lease with a leading national retailer at 322 Norton Street, Leichhardt, underpinning steady rental income and portfolio strength.
- 10-year lease with 5-year renewal options
- Starting rent of $340,273 per annum plus GST
- Property alterations underway by SFN Build
- $2 million equity facility from National Australia Bank
- Tenant responsible for internal fitout works
Long-Term Lease Boosts Rental Profile
Desane Group Holdings Limited (ASX:DGH) has secured a binding 10-year lease agreement with a leading non-discretionary national retailer for its Leichhardt property at 322 Norton Street. The deal, which includes options to renew for two further five-year terms, kicks off with an annual gross rent of $340,273 plus GST, subject to fixed annual and market rent reviews. This commitment provides Desane with a stable income stream from a blue-chip tenant, reinforcing the company’s repositioning strategy for the asset.
Asset Enhancement and Funding Details
To tailor the property to the tenant’s operational needs, Desane has engaged Sydney-based SFN Build to carry out alterations and additions expected to wrap up within six to eight months. While Desane handles the external and structural modifications, the tenant will manage its own internal fitout. The project’s $2 million equity funding comes via a facility from National Australia Bank, reflecting the lender’s continued support for Desane’s development activities.
Portfolio Strength and Market Position
CEO Rick Montrone described the lease as a "significant milestone" that adds a high-quality tenant to Desane’s portfolio. This development follows the company’s recent steady profit performance and active portfolio management, including the ongoing industrial project push in Penrith and refinancing efforts with NAB. The deal complements Desane’s broader strategy of enhancing asset value through targeted developments and securing long-term income streams, as seen in their steady HY25 profit and debt refinance.
Bottom Line?
The new lease anchors Desane’s income with a blue-chip tenant, but investors should watch for tenant fitout progress and the impact of upcoming rent reviews.
Questions in the middle?
- Who exactly is the national retailer behind the lease, and what does their presence signal for the local retail market?
- How will the tenant’s internal fitout timeline affect the overall project completion and rental commencement?
- What are the prospects for lease renewals beyond the initial 10-year term given evolving retail property dynamics?
