Charter Hall sells higher ed investment after two years

Charter Hall has sold a University of New South Wales backed office after two years to meet delayed investor redemption requests to the trust which held it.

The seven storey L5 Building at 221-227 Anzac Parade, Kensington, (pictured, top) opposite the school’s main campus, is trading for $80 million – a $150,000 loss on what it paid a Korean institution.

The buyer this time around is speculated to be a fund managed by Singapore based Keppel Corporation – which, via its REIT, holds a portfolio of suburban assets including at North Sydney and Macquarie Park.

Cushman & Wakefield’s Peter Court and Mike Walsh brokered the latest deal off market.

Deal in line with valuation

With 10,685 square metres, the Kensington building was developed by UNSW in 2005 as a campus and offices, then sold with a leaseback to Westpac (which also recorded a loss when it divested it years later to the Korean institution).

Charter Hall held it in the Direct PFA Fund, worth about $2.5 billion with 20 assets.

The property was listed to meet redemption requests of which the manager owes 75 per cent (story continues below).

The first building in a Westmead innovation precinct being delivered by Charter Hall and WSU.

The weighted average lease expiry is nine years (with fixed three per cent rent rises) but UNSW has multiple renewal options.

The site spreads 2466 sqm, six kilometres south of Sydney’s CBD.

“This divestment is in line with our portfolio curation strategy and demonstrates our commitment to transacting with financial discipline and acting in the best interest of our investors” Charter Hall Direct PFA chief executive officer, Steven Bennett, said.

The value is in line with a recent appraisal.

Elsewhere in Sydney, at Parramatta, Charter Hall and the UNSW recently partnered to delivered an engineering hub.

The fund manager is also co-developing a $350m innovation quarter with multiple buildings, in collaboration with Western Sydney University, at Westmead.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of