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Charter Hall’s nearly $3 billion Direct Property business, today announced that its managed CharterHall Direct PFA Fund (PFA or fund), has acquired a prominent commercial office building opposite thenational parliament building in Canberra for $58.6 million.
The acquisition is consistent with PFA’s strategy of owning an established and growing portfolio of income generating Australian office properties anchored by government and credit rated tenants.
Occupying a strategic corner position in one of the most tightly held office locations the 9,950sqm building at 44 Sydney Avenue, Forrest in the ACT is predominantly leased to the Department of Foreign Affairs and Trade. Constructed in 2003, the building enjoys prominent exposure to SydneyAvenue and State Circle, and arguably is one of the most prestigious commercial property addresses in Australia.
The building also features a 100kW rooftop solar system and has a 4.5 Star NABERS Energy rating.
The weighted average lease expiry of the building is 7.9 years, consistent with Charter Hall’s investment thematic of owning and managing high quality long leased assets to government and creditrated tenant covenants in strategic locations.
Head of Charter Hall Direct, Steven Bennett, said:
“This is a strategic acquisition of a high quality building leased to a government tenant on a long 7.9-year average lease term, which provides anopportunity for investors to access an institutional quality investment opportunity".
“PFA is currently open to investors offering a prospective yield of 7.25% per annum1 income, plus the prospect of capital growth and features quality office buildings located in emerging or established officemarkets around Australia which are predominately leased to government tenants.” Mr Bennett added.
Over the past three months, PFA has raised over $80 million in equity from investors and SMSF trustees and members.
Key features of the fund include a high proportion (>75%) of income sourced from government tenants, and an attractive average lease expiry term of 8.8 years. PFA is forecast to provide more than a 9% per annum total return and pay distributions monthly.