Charter Hall buys Telstra’s Melbourne HQ
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.
AUTHOR
Oksana Patron
Recommended for you
Selfwealth has provided an update on the status of its scheme implementation deed with Bell Financial Group as well as whether rival bidder Svava remains in the picture.
Magellan Financial Group has reported its first half FY25 results while appointing a new chief financial officer and promoting Sophia Rahmani to chief executive.
Schroders Australia has launched two active ETFs and plans to further expand its listed range over the year ahead.
Platform Netwealth has reported its financial results for the first half of FY25, reporting an 80 per cent increase in net flows, with its CEO viewing a “huge opportunity” from private assets.
