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- Charter Hall has teamed up with Abacus for the $630 million purchase of a Sydney CBD building
- Charter Hall will buy 68 per cent of the building, with Abacus covering the remaining 32 per cent. The the transaction will occur in two tranches
- The first tranche includes 75 per cent of the total price to be paid by mid-November 2019. The remaining 25 per cent will be subject to a put and call option expiring at the end of October 2020
- This is the second major building purchase by Charter Hall in the past week, and the third since July.
Charter Hall has established a new partnership to buy 68 per cent of a Sydney CBD building, with Abacus set to purchase the remaining 32 per cent.
The total price for the whole building is $630 million and the transaction will occur in two tranches.
The first tranche includes 75 per cent of the total price to be paid by mid-November 2019. The remaining 25 per cent will be subject to a put and call option, which expires at the end of October 2020.
Abacus will pay a total of $201.6 million to grab its 32 per cent interest.
The building is currently owned in a 50/50 joint venture between Dexus and Perron Group. The property is a prominent A-Grade commercial building with 34 levels of office accommodation over 36,983 square metres of net lettable area. It is found at 201 Elizabeth Street, Sydney, and is opposite Hyde Park.
This is the second major building purchase by Charter Hall in the past week, and the third since July. On July 12, Charter Hall announced the $830 million purchase of Telstra’s Global HQ building in Melbourne.
Then on August 7, Charter Hall announced the the purchase of the Chifley Tower, also in Sydney, which is set to increase the group’s funds under management by roughly $1.8 billion to over $33 billion.
Complementing today’s major purchase is the new Pitt Street metro station, expected to open in 2024. The station will be located diagonally opposite the property, further improving public transport access.
The property is 99.9% occupied and has a 4.5 star NABER Energy rating.
Charter Hall Managing Director David Harrison is said the company is pleased with the deal.
“This off market transaction reflects the deep relationships we have across our platform with our investor customers, with capacity to fund major transactions in the Australian market whilst continuing our partnership relationship with Abacus,” he said.
Other Charter Hall partnerships include an existing DVP partnership and with a new partnership with a Canadian property group, Quadreal.
Charter Hall is a property investment and funds management with over 28 years experience. It is one of Australia’s leading fully integrated property groups.
Abacus is leading diversified property group that invests in real estate opportunities.
Abacus Managing Director Steven Sewell echoed David’s sentiments, saying he believes this deal will benefit Abacus.
“Attractive as a repositioning opportunity to an A-Grade office tower, the acquisition aligns with our strategic priorities and supports Abacus’ transition to a more constant annuity style, strong asset backed business model,” Steven said.
Charter Hall Group is up 1.28 per cent and is currently selling shares at $11.83 per share meanwhile Abacus Property Group has dropped 0.24 per cent and is selling shares at $4.13.
