This article is from the Australian Property Journal archive
Telstra has signed on to become the anchor tenant at Charter Hall’s $550 million office tower developments in Brisbane.
The lease to Telstra is the largest ever pre-commitment in Brisbane. Telstra has entered into a 10-year lease for over 50,000 sqm of space at Charter Hall’s Northbank Plaza and 275 George Street, to be developed into an adjoining site.
Telstra will occupy approximately 18,000 sqm on levels 6-21 at Northbank Plaza, which was formerly the home of the Brisbane City Council.
Northbank Plaza has 26,000 sqm of space and will undergo a complete refurbishment to an “A Grade” standard. The refurbishment of Northbank Plaza will commence in February 2007 and be completed in Q2 2008.
Telstra will also occupy levels 1-24 comprising approximately 32,000 sqm of office space out of a total of 41,000 sqm at 275 George Street. The building is expected to receive Brisbane City Council approval in early 2007 and will be completed in mid 2009.
Charter Hall’s joint managing director David Harrison said that the deal represented an outstanding result for the Charter Hall funds.
The deal will see Charter Hall Opportunity Fund No.4 reach an equity allocation level of over 80% bringing forward the launch of CHOF 5 to early 2007.
The group currently has assets under management totalling approximately $2 billion.
“This transaction shows how the Group’s access to “off market” product, premier development capability, relationships with major corporates and sophisticated deal structuring can be combined to deliver excellent results for our investors.
“Upon completion of the buildings, CPOF will reach approximately 75% of committed equity and raises the likelihood of a new equity raising in early 2008. In addition, the 10 year Telstra commitment will maintain CPOF’s attractive 10 year weighted average lease term across the 4 State, national portfolio,” he added.
“The Telstra covenant also increases the percentage of CPOF’s income generated by public companies, multi nationals and Government tenants to a level exceeding 85%,” Harrison concluded.
The development is being undertaken in a joint venture between two Charter Hall managed wholesale funds, Charter Hall Core Plus Office Fund and CHOF 4.
CHOF 4 has a half share in the two Brisbane office buildings after purchasing it from Queensland developer Indigo Property Group in July 2005. The remaining 50% is owned by CPOF after it bought it from Indigo last week.
By Nelson Yap
