$37m real estate stock Axiom Properties just completed an $80m deal
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Axiom Properties (ASX:AXI) was a big winner this morning after completing a deal more than double its market capitalisation.
Axiom is a property development and investment business with a presence in Sydney, Adelaide and Perth.
Large cap industry peer Charter Hall (ASX:CHC) has agreed to acquire one of its new developments in Adelaide for a total consideration of $80 million.
Namely, South Australia’s new Emergency Services State Command Centre.
The centre will be complete in October next year and be leased to the state government on a 15-year term, to host four emergency service agencies.
It is earthquake resistant and includes features such as backup power and wastewater storage.
The deal includes both consideration for the property and capital to fund the remainder of construction works.
Axiom shareholders got excited about the deal today, sending shares over 30 per cent higher – marking a two-year high.
Axiom promised this won’t be the end of its work on the project even when construction is complete.
It retained development rights over the surplus land which totals 1,200 square metres, enough to hold another facility.
“We were extremely proud to be selected by the South Australian Government to develop this critical infrastructure asset for the state and we are particularly pleased to be working again with Charter Hall to deliver this project and long term government commitment for their Social Infrastructure Fund,” said Axiom managing director Ben Laurence.
Charter Hall hailed the deal too and hinted more projects could be coming.
“We continue to see good opportunities to partner with government and enterprise in South Australia, continuing our long involvement in the state,” said Charter Hall CEO David Harrison.
Axiom said it would use the first $23 million of consideration to repay debt.