Higher ed investment earns $80m from Charter Hall

Charter Hall Group’s David Harrison was last week appointed Property Council of Australia president.

Charter Hall is paying $80.15 million for a higher education investment opposite the main entrance to the University of New South Wales’ Kensington campus.

The seven level UNSW L5 building at 221-227 Anzac Parade contains 10,685 square metres.

The school built it in 2005 – selling the year later with a leaseback to Westpac Office Trust for $41m.

That owner offloaded it in 2009 – two years after the Global Financial Crisis – for $35.5m.

UNSW is the sole occupier on an agreement expiring in 2032 with fixed annual three per cent rent rises.

The school has multiple (renewal) options.

On 2466 sqm, the asset will be held by Charter Hall Direct PFA Fund.

JLL’s Luke Billiau was the sales agent.

Elsewhere in Sydney Charter Hall is building the $350m Innovation Quarter for Western Sydney University which in 2019 pre-committed for 15 years (story continues below).

UNSW L5 building, 221-227 Anzac Pde, Kensington

The UNSW Anzac Parade Light Rail station is in the immediate vicinity of the L5 building, which is about six kilometres south east of the CBD.

Charter Hall Group chief executive and managing director David Harrison – who last week replaced JLL’s Steven Conroy as the Property Council of Australia president – said he valued the new working relationship.

“This additional university-leased asset expands our exposure to higher education and the life sciences sector which we see as a key growth component of our Social Infrastructure strategy, which has grown beyond $3 billion in value,” according to the executive.

Charter Hall Direct chief executive Steven Bennett added the acquisition is consistent with the fund’s strategy for investments with long-leases to large tenants.

The government represents more than 60pc of the trust’s tenant clients, he said.

Following settlement of 221-227 Anzac Pde, Charter Hall Direct PFA Fund will hold 18 properties worth a total of $1.8b. Vacancy is two pc. The Weighted Average Lease Expiry will be 7.8 years.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco