Charter Hall buys Telstra’s Melbourne HQ

Charter-Hall/Telstra/acquisition/

12 July 2019
| By Oksana Patron |
image
image image
expand image

Charter Hall Group has entered the partnership to acquire 100 per cent of the freehold interest in Telstra’s global headquarters in Melbourne, for a total consideration of $830 million.

Following the transaction, the property would be owned by a wholesale partnership comprising the Charter Hall Prime Office Fund (CPOF), the public sector Pension Investments Board (PSP Investments) and the group.

The move would be expected to strengthen Charter Hall’s national relationship with Telstra which built the building for owner occupation in the 1990s, the firm said.

“Given the favourable Melbourne CBD office outlook this acquisition provides the fund with a unique opportunity to further enhance the quality of its existing office portfolio while strengthening the quality of the fund’s cash flow given the long Weighted Average Lease Expiry (WALE) nature of the lease to a high-quality tenant covenant in Telstra,” CPOF’s fund manager, Matthew Brown, said.

The building is currently leased to Telstra Corporation and has a WALE of 11.9 years with the Telstra lease expiring in FY32 plus subsequent options for renewal, benefiting from annual fixed rental reviews of 3.5 per cent.

Charter Hall’s managing director and chief executive, David Harrison, said: “This off market transaction which settles in the 1H FY20, reflects the deep relationships we have across our platform with both investor and tenant customers, with capacity to fund major transactions in the Australian market.”

The fund (CPOF) is also currently looking to raise capital with approximately $300 million of equity raised to date via a pre-emptive process with existing fund investors, with proceeds to be used to help develop fund’s existing core office pipeline, with an approximate on-completion value of $1.6 billion.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call....

1 day 18 hours ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

2 weeks 2 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 5 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5