Charter Hall Secures $458m Bankwest Place Perth Office Complex on Behalf of CPOF and Capital Partners
Charter Hall Group (ASX:CHC) (Charter Hall or the Group) today announced that it has formed a partnership owned equally between its Core Plus Office Fund (CPOF), a domestic super fund and a global institutional partner to acquire the $458 million Bankwest Place (the new Bankwest head office) and the associated Raine Square shopping centre, located in Perth's CBD.
Perth CBD's newest office building, known as Bankwest Place, including the Raine Square retail complex, was purchased from the receivers of Westgem Investments Pty Ltd (Receivers and Managers Appointed) (in liquidation), Korda Mentha.
The complex occupies a total lettable area of 61,564 square metres and is situated on a 12,316 square metre city block and has four street frontages including William, Murray and Wellington Streets. It is also adjacent to the recently completed 140 William Street tower, which is leased to the WA State Government, and overlooks the Kings Square precinct which is currently under construction.
Bankwest Place is forecast to achieve a 5.0 star NABERS Energy rating and comprises 45,000 square metres of prime office space with large 1,747 to 2,242 square metre floorplates. The building is 100% leased to Bankwest, a division of the Commonwealth Bank of Australia, for an initial term of 12 years expiring in 2024, plus options. The 12 year lease benefits from annual 4% rental increases and four yearly market reviews capped at 10%.
Joint Managing Director for Charter Hall, David Harrison, said: 'With annual 4% reviews and a 10% capped market review in three years, we are expecting a compound growth rate of 5% per annum for the office rental income, which represents over 70% of the market rental income profile of the whole complex.'
In addition to the Bankwest Place office tower and associated ancillary offices, the complex includes an approximate 9,831 square metre, three level retail centre anchored by a 15 year lease to Coles Supermarkets and linked to the William Street train station via an underground retail tunnel. The centre opened in 2012 and comprises 67 tenancies with a weighted average lease expiry (WALE) of approximately six years. With the centre still in its establishment phase, Charter Hall will utilise its relationships with national retailers to enhance its performance. The building also comprises two hotel complexes totalling 5,736 square metres which are leased for a further eight years and which offer future potential for expansion.
'The acquisition is in line with our strategy of raising and deploying capital into core real estate investments and continues the momentum of matching our partners' capital with attractive investment opportunities. CPOF benefits from an additional high quality modern office complex, with a 10.5 year office anchor WALE which also enhances the CPOF earnings growth profile.
'Despite the slowdown in the resource sector, we are confident about the longer term outlook for Perth and are attracted to the security of a non-resource tenant of Bankwest's calibre in this active precinct. We also believe we can add value to the non-office components of the complex, utilising our retail experience to extract greater value for our investors,' Mr Harrison said.
Charter Hall will provide its full suite of integrated property services to the partnership including investment management, asset management and leasing. The acquisition will have negligible impact for Charter Hall Group in FY13 and it is expected to be earnings accretive in FY14. The acquisition does not require any co-investment capital from Charter Hall.
|Acquisition price ($m)||$458 million ($454m net of income support)|
|Combined Lettable area (sqm)||61,564 sqm|
|Price sqm lettable area||$7,439/sqm|
|Market Capitalisation rate||7.6%|
|IRR (10-year unlevered)||9.9%|
|Occupancy (% income)||95.5%(100% incl. Income support)|
|WALE (years by income)||9.3 years|
|Parking spaces||377 bays|
|Major tenants||Bankwest (a division of CBA) -12 years Coles Supermarkets - 15 years|
For further information, please contact:
Joint Managing Director
T: +61 8908 4033
Joint Managing Director
T: +61 8908 4025
Head of Listed Investor Relations
T: +61 2 8295 1016
Head of Marketing and Communications
T: +61 2 8908 4093
About the Charter Hall Group:
Charter Hall Group (ASX:CHC) is one of Australia's leading fully integrated property groups, with over 20 years' experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has circa $10 billion of funds under management across the office, retail, industrial and residential sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.
The Group's success is underpinned by a highly skilled and motivated team with diverse experti se across property sectors and risk-return profiles. Sustainability is a key element of its business approach and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors, the community and the Group.