The Charter Hall Direct PFA Fund has announced the acquisition of a $80.15 million office campus leased to The University of New South Wales (UNSW). The property is located at 221-227 Anzac Parade, Kensington in the tightly held eastern suburbs of Sydney.
The asset is a modern seven-storey building completed in 2005 comprising 10,685sqm of lettable area situated on a 2,466sqm site. It is located directly opposite the main UNSW Kensington campus, with immediate proximity to the UNSW Anzac Parade Light Rail Station, on the new Sydney CBD & South East Light Rail line.
The asset is 100% leased to UNSW with 10.75 years lease term remaining. The triple net lease provides for fixed annual increases of 3.0% and multiple option terms.
Charter Hall Group Managing Director and CEO, Mr David Harrison, said “This additional University leased asset expands our exposure to higher education and the life sciences sector which we see as a key growth component of our Social Infrastructure strategy which has grown beyond $3 billion in assets. We welcome another relationship with UNSW, extending our broader university relationship exposures.”
Charter Hall Direct CEO, Mr Steven Bennett, said “The opportunity to invest in the UNSW L5 Building is consistent with PFA’s strategy of acquiring assets with a long leases to strong tenant covenants. PFA continues to attract new equity flows as investors are attracted to the quality of the office portfolio with over 60% government tenant exposure with the remaining income underpinned by excellent tenants such as UNSW, whilst the 6.5% plus income yield and monthly distributions is quite compelling.”
Charter Hall Direct PFA Fund now comprises a portfolio of 18 investment properties, with a weighted average lease expiry of 7.8 years, benefits from 98% occupancy and has a portfolio value of $1.8 billion. The Fund is currently open for investment to retail, HNW and SMSF investors.
The transaction was brokered by Luke Billiau, Head of Capital Markets – NSW, at JLL.
Further Information
The property was originally developed for the UNSW in 2005 by Lipman and was acquired by the Westpac Office Trust in 2006 for $41m and sold 3 years later in 2009 for $35.5 million at what equated to an initial yield at the time of 7.6%.
The UNSW are the current holder of the title and the vendor to Charter Hall.
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