Charter Hall’s managed funds acquire University of Western Sydney (UWS) new office building in Parramatta CBD
Charter Hall Group (ASX:CHC) today confirms that two of its managed funds have each committed to acquire 50% interests in a core Parramatta CBD development site for a purchase price of $16.25 million, located at 169 Macquarie Street and have entered into a development agreement with Leighton Properties for the construction of a new office building pre leased to the University of Western Sydney (UWS) for 15 years plus options.
On completion in December 2016, the new A-grade building will comprise approximately 26,500 square metres of commercial office space across 14 floors, with UWS committing to the entire building on a 15 year lease, with further options. The building is well located on the corner of Smith and Phillip Streets within Parramatta City Council’s greater Parramatta Square Masterplan, a strategic three hectare redevelopment in the suburb’s CBD, and has convenient access to rail, road, bus and ferry transportation. The development is expected to cost the Charter Hall managed funds a total of $220.5 million over the next two years once complete in late 2016.
Lord Mayor of Parramatta, Cr Scott Lloyd, said commencement of the project with Leighton Properties and Charter Hall was a major achievement in the development of Parramatta Square as a world-class urban renewal project and further evidence of the future growth in value of commercial property in Parramatta.
“We are delighted that another blue-chip Australian company has shown such a strong commitment to the future of Parramatta and the development of its key commercial precinct, Parramatta Square. We would like to congratulate Leighton Properties and Charter Hall on their deal and thank them for their investment in our city.
“We welcome Charter Hall as the owner of a major commercial asset that will be the UWS campus, making Parramatta a true university city based on education, research and technology,” he added.
Commenting on the deal, Charter Hall’s Head of Wholesale, Adrian Taylor, said: “The UWS building is a strategic, long leased addition to the CPOF portfolio, which we have been actively evolving over the past few of years into one of Australia’s most modern office portfolios. More than 69% of CPOF’s assets have been built or have completed a major reconstruction within the last 10 years”.
Richard Stacker, Charter Hall’s Head of Direct Property, added: “We are continuing to look for key opportunities to build on the newly relaunched DOF, which is currently open for investment, in order to provide our investors with exposure to a national office portfolio of quality investment grade assets leased to high calibre tenants, with particular focus on the attractive Melbourne and Sydney markets”.
The 14 level A-grade building will consist of eight 2,200 square metre podium floors and six 1,400 square metre tower floors. The podium floors will have access to a central atrium space, drawing light into the building and creating a central point for communication, interaction and circulation. The building is targeting a 5 Star Green Star rating.
Construction is expected to be completed in late 2016 for the first semester of University in early 2017. The acquisition increases the weighted average lease expiry to 7 and 6.5 years respectively for each fund.
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