Charter Hall’s Core Plus Office Fund has teamed up with a global investment manager
to purchase FKP Property Group’s Gasometer 2 development..
According to an article published in The Australian Financial Review, Charter Hall has entered into a 50:50 partnership with PSP Investments, one of Canada’s largest pension investment managers, in a transaction estimated to be valued at $160 million.
Gasometer 2 is a part of the iconic mixed-use Gasworks development located in Newstead, Brisbane
On completion in late 2014, Gasometer 2 will comprise 24,800 square metres of commercial office area, including 15 levels of A-grade office space and 1,056 square metres of retail space.
The Bank of Queensland has already committed to 53% of the building on an initial 12 year lease term, including 12,700 square metres of office space and 475 square metres of retail space.
Charter Hall’s Joint Managing Director, David Harrison, said “The acquisition is in line with our strategy of raising and deploying wholesale capital into core real estate opportunities and demonstrates our ability to match our capital partners’ interests with attractive investment opportunities.
“Charter Hall has a proven track record in delivering high quality office developments as part of our buy, build and hold strategy and will utilise our in-house development team to deliver this new A-grade building.”
Seng Huang Lee, FKP’s Executive Chairman, said the sale provides FKP with an early recognition of development profit from Gasometer 2 and allows the Group to reinvest capital into future stages of Gasworks ahead of schedule.
As FKP’s largest multi-stage development project, Gasworks has an estimated end value of $1.1 billion.
The whole site will include approximately 103,500 square metres of office space, 16,000 square metres of retail space and 750 residential apartments.
FKP has reported that works on the Gasometer 1 development are expected to be completed by the middle of this year.
Gasometer 1 will feature approximately 8,000 square metres of office space and will be home to a number of big-name retail tenants including Woolworths and Terry White Chemists.
Strong interest has been shown in the development, with 95% of retail space now leased.