Charter Hall and Canada’s Public Sector Pension Investment Board have jointly acquired the 47-storey A-grade commercial office tower at 242 Exhibition Street, in the Melbourne CBD, in an off-market $830 million transaction. The office tower was purchased from existing owners Oxford Investa Property Partners (OIPP) and the Investa Commercial Property Fund that both had a 50% interest in the building.
Cushman & Wakefield’s Head of Capital Markets, Australia and New Zealand, Josh Cullen and Head of Capital Markets, Victoria, Luke Etherington, managed the sale on behalf of the vendors, which is expected to settle in the first half of FY20.
The office tower is situated in the north-eastern precinct of Melbourne’s CBD and is currently 100% occupied by Telstra with a 11.5-year WALE. The building comprises 65,913 sqm of net lettable area, including 2,542 sqm of retail and 346 car parking bays. The sale followed a recent $67 million upgrade to the lifts and base building areas.
Cushman & Wakefield’s Head of Capital Markets, Australia and New Zealand, Josh Cullen, said:
“We are extremely pleased to have delivered a favourable outcome for both the purchasers, Charter Hall with backing from the Public Sector Pension Investment Board, and the vendors, Oxford Properties and Investa. Cushman & Wakefield introduced the purchasers off-market at pricing that represented a premium to Book Value and then negotiated with the owners.”
Cushman & Wakefield’s Head of Capital Markets, Victoria, Luke Etherington, said:
“The 242 Exhibition Street sale represented a yield of approximately 4.5% and was supported by a stable long-term tenant as well as the strength of office leasing conditions in the Melbourne CBD more broadly. The deal follows a record financial year for investment in office assets nationally with $23.1 billion in deals, which helped push overall Australian commercial real estate transactions to a new high of $42.6 billion.”