This article is from the Australian Property Journal archive
CHARTER Hall’s Direct PFA fund, facing redemption requests, has offloaded its leasehold interest in the University of NSW’s administration facility in Kensington in line with book value for $80 million.
Located at 221-227 Anzac Parade in Kensington, in Sydney’s inner south east, the purpose-built facility has nine years remaining on the existing lease to the university.
The Charter Hall fund bought the property two years ago for $80.15 million from a Korean institution. The seven-storey building has 10,685 sqm of space and was constructed in 2005 on a 2,466 sqm site that is located directly opposite the UNSW Kensington campus.
Charter Hall Direct CEO, Steven Bennett, said the divestment is “in line with our portfolio curation strategy”.
“Importantly, this asset was sold in line with its independent valuation, demonstrating our commitment to transacting with financial discipline and acting in the best interest of our investors.”
Charter Hall said, “In line with its product disclosure statement, PFA offers investors liquidity windows every five years. PFA accepted all redemption requests received in response to its most recent liquidity event and will meet those requests in full in an orderly and progressive manner”.
The Australian Financial Review had reported this month that the $2.45 billion Direct PFA Fund had received redemption requests equal to 15% of its equity and had paid 25% of what was requested in February. Harrison told the publication another instalment would be paid “shortly” and the rest this year.
He also said the fund had sold some assets and was in the process of selling others.
The fund’s A-grade assets include 570 Bourke Street and 737 Bourke Street in Melbourne, and a 50% share in Sydney’s 12 Shelley Street.
Charter Hall reported a 3.7% loss in value across its office portfolio in the June round of revaluations. CBD towers have been hardest hit. Moody’s has forecast office values to fall because of weaker market fundamentals and the increasing cost of debt. Barrenjoey analysts have warned office tower prices could come off by 15% to 20%. Colliers is expecting capital values to drop by an average of 10% from peak-to-trough, before the market recovers in 2024 – a much less turbulent trajectory than the GFC which saw some assets suffer 25% in devaluations.
The UNSW Kensington transaction was brokered off-market by Peter Court and Mike Walsh at Cushman & Wakefield.
