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Charter Hall Grabs Half Stake of $1.4bn Telstra Portfolio

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Telstra has offloaded its 49 per cent stake in a property trust to a consortium led by Charter Hall for $700 million.

Property group Charter Hall announced a new managed partnership to acquire the 49 per cent interest in a portfolio of 37 Telco exchange properties that will be leased back to Telstra for 21 years.

The $700 million trust, reflects a capitalisation rate of 4.4 per cent and values the entire property trust at $1.43 billion.

Telstra will retain ownership of a 51 per cent controlling interest in the property trust.

Following the news Telstra announced on Friday its asset monetisation reached $1 billion.

In a major transaction for the Charter Hall Group and the Charter Hall Long WALE REIT, the Charter Hall managed partnership will be owned 50 per cent by the Long WALE REIT, 28.2 per cent by a wholesale capital partner and 21.8 per cent by Charter Hall Group.

The REIT has purchased 100 per cent interest in the ATO Office Building in Brisbane for $63.6 million, on a net yield of 7.7 per cent.
▲ The REIT has purchased 100 per cent interest in the ATO Office Building in Brisbane for $63.6 million, on a net yield of 7.7 per cent.


Charter Hall’s Managing Director David Harrison said the partnership continues the successful growth of new partnership funds, and extends the Group’s long WALE investment strategy.

“It also continues the strong relationship we have with Telstra, one of our significant tenant-customers and demonstrates Charter Hall’s leading position in the sale and leaseback market in Australia,” Harrison said.

The property group’s Wale fund also announced the purchase of an A-grade office building in Brisbane middle ring suburb Upper Mount Gravatt.

To fund the acquisitions and associated transaction costs, in an announcement to the ASX, the REIT said it will undertake a fully underwritten equity raising of $261 million.

The Telco Exchange transaction is expected to be completed by the end of August.

Charter Hall will report its financial year 2019 results on 20 August.

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Article originally posted at: https://theurbandeveloper.com/articles/charter-hall-buys-half-stake-of-14bn-telstra-portfolio