Charter Hall pays $96 million to complete 100% acquisition of Perth office tower

Listed property group Charter Hall has paid $96 million to acquire the remaining 50% interest in 225 St Georges Terrace, a 19-level A-grade office building in the Perth CBD. 

The tower, which comprises 21,000 square metres of office space and 1,000 square metres of retail space, has been acquired by Charter Hall’s $1.5 billion wholesale Core Plus Office Fund (CPOF). 

CPOF acquired the remaining 50% from the privately owned Wylie Group at yield of around 9%. 

The fund acquired the original 50% of St Georges Terrace in 2006 for $61.5 million from the Wylie Group. 

According to CBRE, the Perth office market is forecast to be the strongest performer in terms of rental growth over the next few years

Last year Stockland sold its 50% holding in the 52-level BankWest Tower, also on St Georges Terrace, for $130 million to joint owner Brookfield Prime Property Fund. 

At the same time the South Australia’s Motor Accident Commission picked up the CBD’s most eco-friendly new building at 226 Adelaide Terrace for about $100 million from the First State Group. 

The 225 St Georges Terrace building is 100% leased to major tenants including mining giant BHP Billiton, which occupies 71% of the net lettable area, with Wilson Parking leasing and operating the three-level car park.

The acquisition is being funded via a combination of equity from the recent raising and debt through CPOF?s new syndicated debt facility. 

Charter Hall joint managing director David Harrison says the acquisition consolidates CPOF’s investment “in one of Perth’s best-located prime office towers”. 

He adds that the acquisition “is in line with the fund’s investment mandate to own institutional quality assets where incremental value may be generated from rental reversions and possible expansion of the floor space”. 

“Perth has been a strong contributor to CPOF’s performance and we see this continuing within the lowest CBD vacancy office market in Australia,” he says.

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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