Charter Hall is acquiring a commercial property portfolio for A$780 million.
Charter Hall said the leased portfolio comprise three office and one life science/industrial assets and will be owned by Charter Hall Direct funds together with the Charter Hall Long WALE REIT (CLW).
The portfolio will be acquired in joint venture between CLW, who will own 50% of each asset, and the Charter Hall Direct Office Fund (Tuggeranong and Box Hill), the Charter Hall Direct PFA Fund (Albury) and the Charter Hall Direct Industrial Fund No.4 (Alexandria).
The portfolio comprises four assets with a total NLA of 69,503sqm:
- the Services Australia building in Tuggeranong, ACT for A$306 million;
- the Australian Taxation Office (ATO) building in Box Hill, VIC for A$230 million;
- the Australian Red Cross Building in Alexandria, NSW for A$159 million; and
- the ATO Building in Albury, NSW for A$85 million.
The portfolio is characterised by long leases to Commonwealth government or government supported tenant customers with an average WALE of 9.1 years, which benefit from fixed rental increases of between 3.5% and 4.0% per annum (3.6% weighted average rental increase).
“We continue to deliver on the long WALE and government lease thematic that Charter Hall has pursued for many years which, in the current environment of low interest rates and the focus on secure and growing income streams, provides attractive risk adjusted returns to both our listed and unlisted fund investors,” said David Harrison, Charter Hall’s Managing Director and Group CEO.
Harrison commented that it brings Charter Hall’s total acquisitions in FY21 across the office, retail, industrial & logistics and social infrastructure sectors to approximately $7.0 billion.
Charter Hall said this acquisition grows the Charter Hall platforms office portfolio to beyond $23 billion which is secured by a 30% exposure to government/government related tenants.