Charter Hall has swooped in on a premium-grade Sydney office tower, the $1.8 billion Chifley Tower and plaza, which sits on the second largest site area in Sydney’s CBD.
The off-market deal involves two Charter Hall wholesale funds combining to partner with Singapore’s sovereign wealth fund GIC in purchasing the 2 Chifley Square asset in Sydney’s financial district.
Charter Hall’s Prime Office Fund and DVP wholesale funds formed a joint venture that will own a half stake of the Chifley Tower, for around $900 million, in co-ownership with GIC’s existing half stake.
The move will see Charter Hall assume 100 per cent of the tower’s property management, increasing the group’s funds under management by approximately $1.8 billion to more than $33 billion.
Chifley Tower comprises 68,867sq m of lettable area, with more than 5,000sq m of retail across lower and upper ground, and first floor, and 42 levels of office.
The property is 98.3 per cent occupied, secured by a 4.3-year WALE, and leased to blue-chip tenants including UBS, Investec, Sumitomo Mitsui Banking Corp and Morgan Stanley Australia.
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Charter Hall’s chief executive David Harrison described the tower’s location as “arguably the best prime CBD site in Sydney”, which at 6,438sq m is the second largest site area in Sydney’s CBD.
“We have used our diversified funds platform to bring two of our wholesale funds/partnerships together to form a joint venture with GIC to own one of Australia’s pre-eminent premium grade office towers.
“This off-market transaction reflects the deep relationships we have across our platform, extends the office platform funds under management to over $15 billion, while also extending a well-established 15-year relationship with GIC.”
Charter Hall has also been active in Melbourne’s CBD office market, paying $830 million for Telstra’s headquarters last month after bidding on the $1.3 billion 80 Collins Street precinct earlier in the year. More than half of Charter Hall’s commercial pipeline is now located in Melbourne’s CBD.
