Charter Hall Direct Fund secures 12-year lease with Commonwealth at Moonee Ponds, Victoria

Charter Hall’s Direct PFA fund has secured a new 12-year lease with the Commonwealth of Australia in Moonee Ponds, Melbourne.

The property, located at 1 Dean Street, is just 5.5 kilometres from Melbourne’s CBD and will accommodate the Commonwealth later this year, after Charter Hall undertakes a significant repositioning of the asset following the departure of Foxtel.

The four (4) storey building, which already holds a 5.5 Star NABERS Water Rating, will see over 280 solar panels installed, supplying 124kW of power to the building. The upgrade will achieve a minimum 4.5 Star NABERS Energy Rating, adding to the sustainability credentials of the asset. Comprehensive waste management practices will also be introduced, with waste from the redevelopment and office fit-out to be diverted from landfill.

Due for completion in August 2022, the upgrade works will create a new ground floor lobby design, cafe and arrival experience, as well as landscaping and high-quality End of Trip facilities.

Charter Hall Direct CEO, Steven Bennett, said, “This agreement is directly in line with our Fund’s strategy, with a focus on high quality office buildings underpinned by strong tenant covenants with government or well-regarded corporate tenants. We are pleased to welcome the Commonwealth to PFA through this strategic lease agreement, which builds on our commitment to sustainability and enhances PFA to over $2.4 billion in funds under management.”

“The leasing deal increases the defensive income profile of PFA, with over 60% of the Fund’s income profile secured by Australian government tenants.”

Charter Hall Direct Fund Manager, Julian Menegazzo, said, “We are thrilled to be providing the Commonwealth with a new, state-of-the-art, premium office space at 1 Dean Street, previously known as the ‘Foxtel Building’. This agreement will see 75% of the property leased prior to Foxtel’s departure and with significant upgrades, this building will be even more attractive to other tenant customers.”

The Charter Hall managed Direct PFA fund is a $2.4 billion unlisted property fund open for investment.

The Fund continues to outperform the industry benchmark, delivering a 12-month total return of 17.9% to 31 December 2021. PFA invests in a portfolio of Australian office properties anchored by government or well-regarded corporate tenants with the aim to provide investors with sustainable and stable, tax advantaged income and the potential for capital growth. The Fund currently provides over a 6.0% distribution yield per annum to PFA investors.