)
The global headquarters of telco Telstra (ASX: TLS) in Melbourne has been sold for $830 million to property group Charter Hall (ASX: CHC).
The building was purchased off market by a partnership involving Charter Hall, the Charter Hall Prime Office Fund (CPOF) and the Public Sector Investment Board.
Telstra's global HQ stands at 242 Exhibition Street in the Melbourne CBD, comprising 47 storeys which provides for 65,913sqm of net lettable area (NLA).
The property is currently undergoing an extensive building upgrade works program, which includes mechanical upgrades and enhanced end of trip facilities.
Currently the building is leased to Telstra (taking up 99.6 per cent of the NLA), with the lease expiring in FY32 with subsequent options for renewal.
Telstra built the Melbourne tower for owner occupation in 1992.
"This off market transaction which settles in the 1H20, reflects the deep relationships we have across our platform with both investor and tenant customers, with capacity to fund major transactions in the Australian market," says Charter Hall MD and CEO David Harrison.
"We have a strong track record of creating institutional quality investment opportunities that deliver long term sustainable income for our investors."
The fund manager of CPOF Matthew Brown says the acquisition allows the group to further expand its Melbourne CBD portfolio.
"Given the favourable Melbourne CBD office outlook this acquisition provides the fund with a unique opportunity to further enhance the quality of its existing office portfolio whilst strengthening the quality of the fund's cash flow given the long weighted average lease expiry nature of the lease to a high-quality tenant covenant in Telstra," says Brown.
CPOF is currently undertaking a capital raising with approximately $300 million of equity raised to date via a pre-emptive process with existing fund investors.
Proceeds of this raise will be used to help fund CPOF's office pipeline which has an on-completion value of approximately $1.6 billion.
Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
