$415m deal sealed for Parramatta’s Jessie Street Centre
The acquisitive Charter Hall has put its belief in the suburban office markets of Sydney on display, unveiling a deal backed by Singapore’s sovereign wealth fund to buy the Jessie Street Centre in Parramatta for about $415 million.
The purchase from Canadian giant Brookfield comes just a day after the Australian funds manager won the race to buy an under-construction Macquarie Park office building, which John Holland is building in Sydney’s northern suburbs, for about $331m.
The investments shows the boom in CBD assets is spreading to the suburbs and indicate Charter Hall’s desire to boost its portfolio of long-leased government assets.
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Underlying the purchases is Charter Hall’s belief that it will be able to lease empty areas in the buildings it is buying as demand for space in the suburbs is high, and that it has the capacity to overhaul older buildings to meet the needs of their tenants.
Charter Hall said it had extended its ties with Singapore’s GIC Real Estate through a partnership, which has bought the Parramatta building.
The A-grade office building, with supporting retail, has a net lettable area of 53,900sq m. The property is 99.9 per cent occupied with a weighted lease term of 3.9 years and has a 5.5 star NABERS Energy Rating. It is mainly leased to the Australian Taxation Office, AMP Services and various NSW departments.
Charter Hall chief executive David Harrison said the “strategic acquisition” further strengthened the listed group’s partnership with GIC.
The pair are also co-invested in Sydney’s Chifley Tower and Mr Harrison said GIC recognised the company’s “strong track record of creating institutional quality investment opportunities that we can add value to using the second largest office platform in Australia”.
The tower will benefit from significant developments and infrastructure projects in the surrounding precinct including tycoon Lang Walker’s Parramatta Square and the Parramatta Light Rail project.
GIC Real Estate chief investment officer Lee Kok Sun says Parramatta is expected to benefit from Sydney’s forecast population growth and planned infrastructure enhancements, including a new metro line to the Sydney CBD and a light rail link
“As a long-term value investor, we are confident this asset will generate resilient, income-driven returns. We look forward to strengthening our partnership with Charter Hall through this transaction and working together to add value to this asset,” he says.
The tower is on a 13,530sqm site that holds longer-term redevelopment potential.
Brookfield tapped real estate brokers Paul Roberts, Ben Schubert and Graeme Russell of Knight Frank and Steven Kearney, Josh Cullen and Rick Butler of Cushman & Wakefield to advise on the sale.
This article originally appeared on www.theaustralian.com.au/property.
