Taking advantage of Sydney’s popular second CBD office market, Charter Hall’s Direct PFA Fund has offloaded its seven-storey building to a private investor for $64.25 million.
The 9 Wentworth Street building in the Western Precinct of Parramatta comprises a net lettable area of 7,651sq m, and a site area of 1,627sq metres.
Constructed in 1988, the property is 94 per cent occupied with three major tenants: the Commonwealth of Australia, Australian Business Academy and Australian College of Nursing. While the retail proportion is currently vacant.
Charter Hall Direct chief executive Steven Bennett said the proceeds of the sale will be reinvested into high quality assets with longer WALEs.
“Like the recently announced acquisition of a $165 million Macquarie Park new office complex leased to the New South Wales government on a long 12 year lease term,” Bennett said.
More than 280,000sq m of stock is currently under construction in Parramatta, of which 70 per cent has been pre-committed, according to a recent Knight Frank office market report which expects vacancy to remain tight.
With no new supply over the period, the vacancy rate tightened from 3 per cent to 2.7 per cent in the six months to July.
Charter Hall has been busy in Parramatta. Last year it partnered with Western Sydney University to co-develop a $350 million education, health and commercial office hub.
While two Charter Hall funds own the $220 million 15-storey vertical campus at One Parramatta Square.
Earlier this month, Charter Hall joined forces with Singaporean wealth fund GIC to purchase an A-grade office tower from Canadian giant Brookfield for $415 million.
Following the Wentworth Street sale the fund holds 14 office properties throughout Australia with an overall portfolio WALE of 8.1 years. The current income yield for new investors is 7 per cent per annum.