Charter Hall acquires $245 million portfolio of government-leased assets from DOMA11 August 2021
Charter Hall Group has acquired a $245 million portfolio of government-leased assets from private developer DOMA in an off-market transaction brokered by Paul Powderly from Colliers International.
The portfolio includes two well-located high-quality office assets in Newcastle and Canberra, with an average initial yield of 5.2%, secured by a 9-year WALE.
Two Charter Hall Direct funds, the Charter Hall Direct Long WALE Fund (LWF) and Charter Hall Direct PFA Fund (PFA), have acquired the $146 million Newcastle asset for $73 million each. The asset is an A-grade office asset, anchored by the NSW government, introducing high-quality, government covenants to the LWF portfolio, whilst extending the PFA government exposure to over 60%. The recently completed building is targeting a 5-star NABERS Energy rating, a 4-star NABERS Water rating and a 5-star Green Star Design and As-Built rating from the Green Building Council of Australia.
This acquisition by LWF complements two recently completed acquisitions including a Coles freestanding supermarket at Five Dock in Sydney with a 14.8-year lease term remaining, together with a Shell (Viva Energy) anchored service centre on the Gold Coast. In total, the three properties contribute to $120 million in growth for the fund and a combined WALE of 10.3 years.
Charter Hall Direct Fund Manager, Julian Menegazzo, said, “All three acquisitions implement our fund strategy to acquire well-located properties with long leases to high-quality tenants across resilient property sectors. Newcastle is a brand new, high-quality office complex with strong environmental credentials. Further, this asset improves the overall quality and diversification of the LWF portfolio by providing an allocation to the office sector and increasing the portfolio weighting to the expanding NSW commercial market, with the strong tenant security that government tenants offer.”
Charter Hall Prime Office Fund (CPOF) has purchased a 100% interest in 18 Canberra Avenue, Canberra, a prime commonwealth government-leased building to Services Australia, which occupies 100% of the building. Also known as the Doris Blackburn Building, the building is an A-grade office asset which was purpose-built for Services Australia as their head office, and benefits from its close proximity to Parliament House. The building has a 5-star NABERS Energy rating and a 5-star Green Star rating.
Charter Hall Fund Manager CPOF & Head Office Investment Management, Matthew Brown, said, “We are pleased to extend CPOF’s relationship with Services Australia through this acquisition, following its 28,000sqm pre-lease of our new 60 King William Street $450 million complex in Adelaide CBD. This building is a well-located, modern, purpose-built asset that aligns well with our strategy of acquiring properties leased to high-quality tenants on long-term leases and meets our high standards for sustainability in all our assets.”
Charter Hall Head of Transactions, Ben Ellis, said, “This portfolio acquisition extends Charter Hall’s long-term track record of securing more than 50% of our acquisitions off-market across all sectors, including the recently announced $560 million of industrial acquisitions acquired off-market. We continue to focus on assets that improve the overall quality and diversification of our funds to provide resilience and security of returns for our investors.”