Charter Hall‘s PFA fund has purchased two offices in Melbourne and Adelaide for a combined A$275m (US$192.3m), marking its first deals in either CBD market.
The fund bought the 737 Bourke Street building in Melbourne for A$192m and the 121 King William Street property in Adelaide for $82.25m, the company announced.
Located near Southern Cross train station, the grade-A Melbourne asset offers 18,500 sq.m. of net lettable office and retail area.
737 Bourke Street (image: Charter Hall)
The nine-storey property is 98% occupied, with tenants including Lion Dairy and Drinks, owned by the global Kirin Holdings, Symbion Health and the Victorian Building Authority.
It has a 5.5-year weighted average lease expiry (WALE) and average rent reviews of 3.7% per annum.
Charter Hall noted that the Docklands precinct was reaching capacity with limited future supply opportunities and high tenant demand driving down the precinct’s prime vacancy rate to 0.7%, as of end-2018.
Head of Charter Hall Direct, Steven Bennett, said the acquisitions represented the fund’s first assets in either CBD market.
“These acquisitions reflect strategic investments in the core Melbourne and Adelaide office markets which are continuing to experience strong tenant demand and effective rental growth,” he said.
“The relatively new properties are strategically located, multi-tenanted and further improves the PFA portfolio quality.”
The deals follow Charter Hall’s purchase of the 12 Shelley Street office tower in Sydney in late 2018.
The PFA fund, which is valued at A$966m, owns 14 office buildings in capital city markets across seven Australian states and territories.
Charter Hall is an Australian-listed property fund manager, with A$28.4bn of assets under management.