Charter Hall plans purchase of Parramatta’s $400m Jessie Street Centre
Property funds group Charter Hall is putting its faith in Sydney’s office markets on display with a play for the Jessie Street Centre in the western Sydney hub of Parramatta that is being sold by Canadian group Brookfield for more than $400 million.
The group has put its stamp on office transactions across the city and has just bought a half-stake in the $1.8 billion Chifley Tower and Plaza and a $630 million office block overlooking Hyde Park, which it bought with Abacus.
Charter Hall is backing its ability to draw further value out of the properties it is acquiring despite the elevated state of the market. It has built up a $33bn network of property funds and is targeting buildings that can be repositioned, specifically for large tenants with which it has deep relationships.
Commercial Insights: Subscribe to receive the latest news and updates
Charter Hall is also able to secure capital across its funds network to defray the risks in its acquisitions.
The group targets the upper echelon of the market with a focus on Sydney deals for A-grade or prime buildings that are leaders in their sub-markets.
The group, led by David Harrison, is acting when vacancy rates are tight, and it has access to cheap debt at a time when the lower-for- longer thesis is being borne out in bond markets.
Canadian property group Brookfield put the Jessie Street Centre in the heart of Parramatta up for sale in April. Charter Hall knows the area well and it already has several Parramatta towers in its workbook or under its control.
The western Sydney hub is gathering pace, with a brace of office tower developers vying for position around tycoon Lang Walker’s Parramatta Square precinct.
Walker has secured major precommitments from the Berejiklian government and NAB. The government has also finalised plans to buy a riverbank site, which is currently a car park, for its planned Powerhouse Precinct.
Other office players are also jockeying for position, with GPT, Dexus, Mirvac, Australian Unity, Scentre and private interests proposing new towers.
The Jessie Street complex includes a four-level office podium with an expansive atrium and 15 upper levels of offices.
Brookfield extensively refurbished it from 2007 to 2009 and the tower is occupied by government and legal tenants.
The 53,901sq m tower is on a 13,530sq m 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.
The parties and agents declined to comment yesterday but a series of Parramatta office deals in the wings as new groups look to boost their exposure to the area.
Brookfield has sold other assets and is separately disposing of a half stake in the $800m headquarters in Perth it is developing for US energy giant Chevron via JLL and Cushman & Wakefield.
This article originally appeared on www.theaustralian.com.au/property.
