Leading property investment management company Charter Hall has sold a 50 per cent stake in its 555 Collins Street office development in Melbourne’s CBD to Singapore’s sovereign wealth fund GIC for an undisclosed fee.
The Sydney-based real estate group acquired the 3,000sqm site in 2018 before applying for and receiving planning permission for an 84,000sqm state-of-the-art twin office tower precinct in 2020.
Designed by Sydney-based architecture firms Cox Architecture and Gensler, the site will be the Victorian headquarters of e-commerce giant Amazon, which was confirmed as an anchor tenant in April 2021.
“We’re delighted to extend our 22-year partnership with GIC offering one of our CPOF investors the opportunity to co-own what we believe will be one of Melbourne’s pre-eminent new office precincts,” Charter Hall group CEO David Harrison said.
“This transaction has provided our flagship office wholesale fund, CPOF, with capital to expand our Melbourne office portfolio via the acquisition of Southern Cross Towers and to further invest in Stage two of 555 Collins Street, when appropriate.”
The development secured planning approval from the Victorian Government under its Building Recovery Taskforce, which was established to identify and accelerate shovel-ready priority projects.
While still under construction, stage one of the development is due to be completed in 2023. Once finished, it will comprise 48,000sqm of lettable area, strategically positioned across three street frontages on the corner of Collins and King Street alongside direct access to Flinders Lane.
The building, which will accommodate 4,500 workers and include 2,300sqm of retail space, will be surrounded by other premium-grade office towers such as Rialto, 530 and 567 Collins Street.
“Our development and asset management teams have achieved leasing with major commitments from Amazon and Aware Super, whilst further leasing is well advanced, highlighting the bifurcation we have expected with tenant customers increasingly attracted to brand new, state-of-the-art space to satisfy the expectations of their people and customers,” Charter Hall Office CEO Carmel Hourigan said.
“This partnership expansion with GIC provides further evidence of the value of prime real estate and of the commitment from our long-term partners to invest alongside our funds. The CPOF portfolio has grown beyond $9.5 billion in scale and represents the single largest office portfolio within the group’s $26 billion office platform.
“Pleasingly, we have curated—through develop to core strategies—a high-performance investment for our CPOF investors, as evidenced by its no.1 ranking in the MSCI wholesale office index over all reported time periods from one to ten years.”
The transaction, which was negotiated directly between GIC and Charter Hall, has received approval from Foreign Investment Review Board (FIRB).
Charter Hall, which manages a portfolio of more than 1,500 long-leased properties worth approximately $61.3 billion, has recently extended its Fund Management capability into another asset class with the 50 per cent acquisition of the $18.2 billion listed equities fund manager Paradice Investment Management (PIM).
GIC is one of the three investment entities in Singapore that manage the Government’s reserves, predominantly managing financial assets and investing for the long term to preserve and enhance the international purchasing power of the funds placed in its care.
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