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Charter Hall Direct PFA Fund (Fund), which invests in quality Australian office buildings tenanted by government and high calibre corporates, has announced the sale of 9 Wentworth Street, Parramatta, NSW for $62.6 million to a private investor.
The 7-story office building constructed in 1988 is situated in the Western Precinct of Parramatta near Parramatta Railway Station and comprises net lettable area (NLA) of 7,651 sqm, 87 basement car spaces and a site area of 1,627 sqm. The building has a 5 Star NABERS energy rating and 4 Star NABERS water rating.
The property is 94% occupied, with three major tenants: the Commonwealth of Australia (62% NLA), Australian Business Academy (16% NLA) and Australian College of Nursing (16% NLA), with the retail proportion currently vacant (6% NLA), however subject to a Heads of Agreement. The net passing income of the asset is $3.57 million.
The headline sale price was $64.25 million and the net figure after deduction of outstanding lease incentives was $62.6 million. Charter Hall Direct CEO, Steven Bennett, said: “The sale is an excellent result for investors in the Charter Hall Direct PFA Fund at a price 15.9% in excess of the 30 June 2019 independent valuation and a premium to what was expected as a 31 December independent valuation.”
“The transaction is consistent with the Fund’s strategy of holding long-WALE (weighted average lease expiry) assets. The WALE of 9 Wentworth Street is 3.6 years, whilst the average WALE for the overall Fund portfolio prior to the sale was 7.9 years, thereby providing accretion to the portfolio WALE.”
“The proceeds of the sale will be reinvested into high quality assets with longer WALEs like the recently announced acquisition of a $165 million Macquarie Park new office complex leased to the NSW government on a long 12 year lease term” Mr Bennett said.
Charter Hall Direct PFA Fund is currently open for investment. Following the sale of 9 Wentworth Street the Fund holds 14 office properties throughout Australia with an overall portfolio WALE of 8.1 years. The current income yield for new investors is 7.0% pa1.