Charter Hall Kick Starts Capital Raising, Buys Macquarie Park Office


Charter Hall’s ASX-listed Long Wale REIT has turned to the market to fund $270 million of property acquisitions at an average 4.9 per cent capitalisation rate.

The fund manager will use the equity to buy a half stake in John Holland’s Glasshouse building in Sydney’s Macquarie Park, a large-format Bunnings Warehouse in Darwin and a 15 per cent interest in the Charter Hall-owned 242 Exhibition Street in Melbourne’s CBD.

The 50 per cent stake in the Glasshouse building, located at 45-61 Waterloo Road, sold for $165.7 million on a passing yield of 5 per cent. John Holland offloaded the other half stake in the A-grade 34,898sq m Macquarie Park building to Charter Hall’s Direct PFA Fund.

The building is 70 per cent pre-committed to the NSW government on a 12-year lease with practical completion slated for early next year.

The 15 per cent stake in 242 Exhibition Street—acquired by Charter Hall for $830 million in July—was purchased for $63.3 million on a passing yield of 4.5 per cent. The tower serves as Telstra’s global headquarters, which takes up 95 per cent of the 65,940sq m asset.

Related: REITs Boost Coffers as Investor Appetite Ramps Up

▲ The Telstra-headquartered 242 Exhibition Street was acquired by Charter Hall for $830 million.
▲ The Telstra-headquartered 242 Exhibition Street was acquired by Charter Hall for $830 million.

The third asset, an under-construction Bunnings store on a 4-hectare site in Darwin’s Palmerston, was acquired for $41.3 million.

Charter Hall’s Long Wale REIT has enlisted UBS and JPMorgan to raise the $242 million at $5.50 per share. The Long Wale REIT has also upped its operating earnings per share guidance to 28.1 cents per security—a 4.5 per cent growth in operating earnings a share.

Charter Hall Long Wale REIT fund manager Avi Anger said that the run of acquisitions enhance Charter Hall Long Wale REIT’s portfolio.

“These properties feature long leases to high-quality tenants with 83 per cent of income derived from NSW government, Telstra and Bunnings,” Anger said.

“The properties are also predominantly located in the strongly-performing Sydney and Melbourne office markets.”

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