This article is from the Australian Property Journal archive
CHARTER Hall’s Prime Office Fund (CPOF) has acquired the remaining 50% stake of 275 George Street in the Brisbane CBD for $275 million from co-owner Keppel REIT, taking full ownership of the A-grade office tower that it developed 12 years ago.
Exercising its first right of refusal option, CPOF purchased the share in line with the current 30 June independent valuation, reflecting a core capitalisation rate of 5%.
Charter Hall originally developed the tower in 2009 along with the adjoining 69 Ann Street building following one of Brisbane’s largest CBD tenant pre-commitments, which saw Telstra occupy 50,000 square metres of office space across both buildings.
The twin tower complex has a combined 68,400 sqm of lettable area and is on a triple fronted site that, at 8, 000 sqm, is one of the CBD’s largest. It is adjacent to the Brisbane Town Hall and directly opposite Charter Hall’s existing Brisbane Square precinct.
In addition to Telstra, tenants within the 41,749 sqm 275 George Street building includes Shell and both federal and state government agencies.
“This acquisition is consistent with Charter Hall’s office precinct strategy and demonstrates our key focus on owning and managing high quality office buildings in prime locations across major Australian CBDs and other high conviction markets,” Charter Hall office CEO, Carmel Hourigan said.
“By acquiring the remaining stake in this property, we are also increasing CPOF’s exposure to long-term, high quality tenant customers, in line with Charter Hall group’s proven customer focussed approach.”
Fund manager of CPOF, Matthew Brown said the acquisition is a continuation of CPOF’s tactical re-weighting of the portfolio towards high quality modern assets on the eastern seaboard where we have the ability to successfully create major CBD precincts.
Bustling Brisbane market
Expressions of interest closed several weeks ago for Charter Hall’s No.1 Brisbane offering, which comprises three buildings, 217 George Street, 60 Queen Street and 231 George Street.
Charter Hall and Abacus Property Group’s CHAB Office Trust acquired 241 Adelaide Street for $63.5 million in March as Brisbane’s office market kicked into gear, while the City of Brisbane Investment Corporation offloaded a smaller asset, the heritage building at 262 Adelaide Street, for $18.8 million.
In May, Cromwell Property Group paid $117.5 million for the A-grade 545 Queen Street tower, on a 2,735 sqm parcel at the entrance to the city’s Golden Triangle precinct, occupied by tenants including Sonic Healthcare, the federal government and Calibre Professional Services.
The Dmann Corporation is reportedly close to buying 444 Queen Street, which Abacus Property Group and the Public Trustee of Queensland have made a 100% interest in the 23-level tower available for the first time.
Brisbane-based Marquette Properties’ acquired 10 Eagle Street for $285 million from Dexus and Canada’s CPP Investment Board, while AsheMorgan paid $210 million for 310 Ann Street a fortnight earlier. They traded on cap rates of 5.5% and 5.4% respectively.
As a result of the acquisition, the CPOF portfolio will grow to $7.5 billion in assets under management, with an additional $1 billion of committed pre-leased office projects nationally.
