Charter Hall Group (ASX: CHC) continues to splash out on Canberra office properties linked to government departments and agencies, snatching up another asset in the nation's capital for $290 million.
Situated at 21 Genge Street, the 42,000sqm twin-tower is occupied by the Australian Taxation Office (ATO) and Department of Veteran Affairs, sitting directly across from 260-retailer shopping mall Canberra Centre.
Owned by Charter Hall Prime Office Fund (CPOF) – which manages $10 billion in modern office buildings – together with Charter Hall Group, the office space was considered an attractive buy due to its “large floorplates” and “ideal location”. As part of its investment strategy, the fund managers will be looking to extend to the WALE of the building.
The buy-out comes four months after the CPOF announced it had partnered with DOMA and Kenyon Investments to acquire a site in Canberra’s Barton to develop a new headquarters for the ATO.
“CPOF continues to curate its portfolio with modern office assets leased to blue chip customers,” Charter Hall managing director and CEO David Harrison said.
“The relatively high passing yield provides enhanced distribution yields and total returns, while further enhancing resilience in the overall portfolio.
“The group also sees deep value and has added this investment to its balance sheet of co-investments to drive earnings growth and incubate for future partners.”
Charter Hall Office CEO Carmel Hourigan added the group welcomed two of its major existing tenants - the ATO and the Department of Veteran Affairs - to its $30 billion office portfolio, and looked forward to adding value to the building for their benefit.
“Canberra’s office market is one of Australia’s most resilient office markets with low vacancy rates for prime stock, while large floor plates within a two-tower complex provides flexibility in meeting customers’ needs," she said.
The news comes more than a year after Charter Hall and Singaporean wealth fund GIC acquired a 40,000 sqm office building fully leased to government tenants in Canberra for $355 million.
In December 2021 GIC acquired the vast majority of 50 Marcus Clarke Street - where staff from the Education and Workplace Relations Departments work - with Charter Hall owning the remaining five per cent.
Charter Hall's latest acquisition comes almost three months after the first stage of the $350 million Westmead Innovation Quarter (iQ) - a joint venture between the property investor and Western Sydney University - officially opened.
Shares in CHC are down 0.48 per cent today to $14.58 each at 10:37am AEDT.
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