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As seen in the Source link, written by realestatesource.com.au on 2019-11-12 07:04:10

Charter Hall is continuing a national spending
spree
– outlaying $331.3 million for a suburban Sydney office majority
leased to the New South Wales Department of Transport.

The Glasshouse, or Building C of the Macquarie Square business park (artist’s impression, below), is due for completion next March.

Charter Hall’s Long WALE REIT will control a 50 per cent in the property at 45-61 Waterloo Road: it is set to launch an equity raising campaign seeking investors to the fund (which will control 15 per cent of the 242 Exhibition Street office in the Melbourne CBD which we reported was being acquired in May).

The Charter Hall Direct PFA Fund will own the balance of
The Glasshouse.

The Glasshouse building, due for completion in March, 2020, has sold for $331.3 million.

Macquarie Square is being developed by China backed construction
company John Holland on a three hectare block it acquired for $90 million in
2017.

Upon completion, the master planned campus-style workplace (artist’s impression, below) will contain about 117,017 sqm of office space within five buildings.

All will overlook a 7000 sqm public park.

Often promoted as Sydney’s second-largest CBD, Macquarie
Park is about 15 kilometres north of the city – and a two minute walk to the John
Holland built Sydney Metro Macquarie Park train station.

This Metro North West line connects Sydney’s western
suburbs to Macquarie Park through to Chatswood.

In 2024, this infrastructure is set to be extended to the
city.

John Holland executive general manager Development and
Investments, Tom Roche, said “with more than 80 per cent of the Glasshouse
leased…this is clearly a market that will continue to grow”.

The Glasshouse will rise eight storeys and offer 34,099 square metres of A-grade office space, part of which is currently for rent, as well as 848 sqm of retail area.

The Glasshouse building

The Glasshouse building contains 34,099 sqm of lettable A-grade
office area over eight levels, as well as 848 sqm retail space, end of trip
facilities and 350 car parks.

The NSW government has pre-committed to 73 per cent of it
on a 12 year lease, with options.

At the building completion date, if any part of the
office is still vacant, vendor John Holland will provide a three year rental
guarantee which requires minimum five year lease terms to be secured.

On those terms – this is, for Charter Hall, a fully
occupied investment with a 9.4 year weighted average lease expiry (WALE).

It is acquiring the asset on an approximate 5 per cent
yield.

Colliers International’s Jon Chomley, Adam Woodward, James Mitchell and James Barber with JLL’s Rob Sewell, Paul Noonan and Simon Storry launched a marketing campaign for the office in June.

Charter Hall Direct chief executive officer Steven Bennett added “the opportunity to invest in The Glasshouse is consistent with the PFA’s strategy of acquiring assets with a long WALE, leased to strong government and corporate tenant covenants.”

“The Fund is benefiting from strong investor equity inflows
as investors are attracted to the quality of the office portfolio, the Fund’s
distribution yield of 7 per cent and the monthly distributions paid to
investors.

“Large prime assets like The Glasshouse are of the highest
quality and often are only within the reach of large institutional investors,”
the executive added. “As a result of the access to deal flow from the Charter
Hall Group, we are able to offer retail, HNW and SMSF investors exposure to
institutional quality assets by partnering with other Charter Hall funds”.

Charter Hall a landlord to the government…again

Australian Federal Police will occupy all of Charter Hall’s proposed 140 Lonsdale Street office in the Melbourne CBD.

Charter Hall has
been establishing a stronger relationship with the federal government, and
state governments over recent years.

Late last month we reported the group secured Australian Federal Police as the sole-occupier of a 20-storey office set for construction at 140 Lonsdale Street in the Melbourne CBD (artist’s impression, right).

A year ago today, we
reported
it acquired industrial investments tenanted to the AFP.

In June we
reported
it spent $102.5 million on a bus depot rented to the Queensland state
government.

In Melbourne, it controls assets also leased to the Victorian
government.

Charter Hall Office chief executive officer Adrian Taylor
said “the investment extends Charter Hall’s strong relationship with the NSW government
as a major tenant customer of our office portfolio.”

“We have a strong track record of partnering with government
tenant customers and ensuring we deliver quality workplace solutions over the
long term,” Mr Taylor added.

The Charter Hall Direct PFA fund now includes 15 offices worth
about $1.2 billion. The offices are 99 per cent occupied providing a WALE of 7.9
years.

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