Charter Hall in c$800 million play for Melbourne’s 242 Exhibition Street
Charter Hall is reportedly in negotiations to buy a Melbourne CBD office for nearly $800 million.
The Sydney-based fund manager is speculated to be acquiring 242 Exhibition Street off-market from Investa Commercial Property Fund and Oxford Properties, which each own a half share.
Completed in 1992, the 43-level building A-grade building, containing 65,931 square metres of lettable area, has been occupied by telecommunications giant Telstra for decades. Its lease on the building, which it calls the Telstra Corporate Centre, expires in 2031.
Based on the rent Telstra currently pays, Charter Hall would be acquiring 242 Exhibition Street on a 4.5 per cent passing yield.
Oxford Properties secured its share following its $3.35 billion buy-out of the Investa Office Fund last October.
The Exhibition Street office is half a block from Charter Hall’s $1.2 billion Wesley Place, which is under construction.
Wesley Place includes a new 35-storey office at 130 Lonsdale Street and a 22-level commercial building next door, at 140 Lonsdale Street. It will also involve the refurbishment of an existing 29-storey building at 150 Lonsdale Street.
Charter Hall is building Wesley Place on a 7445 sqm site it seized control over in 2016, from the Uniting Church.
This month we reported that Charter Hall was paying $192 million for a modern office at 737 Bourke Street, Docklands.
Elsewhere in the city recently, Charter Hall’s Direct Industrial Fund 4 also paid $29.5 million for an Altona logistics centre.
At the city’s west end, Charter Hall recently lodged plans to build an office at 555 Collins Street, which its Prime Office Fund acquired last October for $140 million. Charter Hall also owns 55 King Street – which abuts 555 Collins Street.
