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.
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.