Charter Hall Group (ASX: CHC) today announced its Core Plus Office Fund (‘CPOF’) has purchased a 50% interest in one of Brisbane’s landmark office buildings, Brisbane Square, in a 50:50 joint venture with Telstra Super for a total net consideration of $300 million.
CPOF and Telstra Super have purchased 100% of the 57,300 square metre building from Westscheme, with settlement scheduled for mid November 2010.
Brisbane Square, completed in 2006, is an A-grade office building located in the north quarter precinct of Brisbane’s CBD. The building occupies a whole city block that borders Queen Street, George and Adelaide Streets, at the top of the Queen Street Mall, and has expansive views of Brisbane River. Offering 37 levels of office space and 1,270 square metres of retail, Brisbane Square is 100% leased to high quality tenants including Brisbane City Council and Suncorp-Metway, and has a weighted average lease expiry of over 10 years.
Mr David Harrison, Charter Hall Group’s Joint Managing Director said: ‘This acquisition is one of Australia’s largest single asset transactions this year. Brisbane Square provided an ideal opportunity to purchase a well located, CBD prime office building with strong financial covenants at an attractive price of $5,200 per square metre of lettable area and potential capital growth given the passing rents are approximately 38% below market levels.’
Telstra Super CEO, Mr Martin Crowe said: ‘Telstra Super was attracted to Brisbane Square by its quality and sustainable investment returns. The return profile, comprising secure income streams and capital growth capability, is very much aligned with the objectives of our members.’
CPOF is a wholesale office property investment fund managed by Charter Hall which owns 15 investment grade assets, valued at $1.2 billion, located within Australian core CBD office markets.