The Charter Hall managed Direct Office Fund (DOF), one of Australia’s largest direct office funds available to retail, High Net Worth and SMSF investors with over $1.7 billion in funds under management, has announced a major new acquisition at 61 Mary Street in Brisbane’s CBD for a total consideration of $275 million. The property is in the core of the Government Precinct and is 100% leased to the Queensland Department of Transport and Main Roads with a 10.4 year weighted average lease term and fixed 4% p.a. rent reviews.
The head of Charter Hall Direct, Steven Bennett, commented on the acquisition: “The opportunity to invest in this property is consistent with the DOF strategy of acquiring assets with a long WALE, leased to strong tenant covenants, underpinned by high quality and resilient cash flow, in strategic locations.
“The asset provides DOF an opportunity to re-position capital into the core Brisbane CBD backed by a long-term lease to the Queensland Government and potential positive rental reversion at the 2023 market rent review.”
The property, which completed a $38 million refurbishment works program in 2018, comprises an AGrade office tower with ground floor café and foyer, two basement levels of car parking for 253 cars, end of trip facilities, 17 upper office levels, a large site area of 3,646 sqm with a typical floor plate of 1,539 sqm providing a total Net Lettable Area of 28,750 sqm.
“Large and prime quality assets like 61 Mary Street are generally not directly accessible to SMSFs and mum and dad investors. The Charter Hall Direct business benefits from the size and scale of the Charter Hall Group by being able to leverage its highly qualified and experienced transaction team who completed $1.4 billion in net acquisitions in the 2018 September Quarter.” Mr Bennett added.
The property is strategically located within walking distance from the future Albert Street Cross River Rail Station, 500m from Queen Street bus station, approximately 550m from King George Square bus station and within 1km of Central Station. The property is in close proximity and is expected to benefit from the nearby $3 billion Queen’s Wharf mixed use development and the 300 George Street development comprising a hotel, commercial and residential.
Charter Hall Office CEO, Adrian Taylor explained that the acquisition extended the Group’s relationship with the Queensland Government and increased the Group’s significant investments in Brisbane CBD.
“The office market is extremely competitive for high quality long WALE investment assets, particularly leased to government and credit rated tenants. This investment extends the relationship the Charter Hall Group has with the Queensland Government as a tenant customer and further extends our significant investments in the Brisbane CBD where we are seeing improving market conditions and positive rental reversion drivers.”
The Charter Hall Direct Office Fund (DOF) is currently open to investors.