Charter Hall’s unlisted office fund has completed a first close equity raising of $340 million, winning support from local and offshore investors, existing and new.
The $3.5 billion Charter Hall Prime Office Fund will use the capital raising to back its development pipeline of around $1.5 billion in projects.
“Global investment conditions remain favourable for the Australian commercial property market, which is competitive for high-quality, long leased investment assets,” said Charter Hall’s chief executive for office Adrian Taylor.
The funds management platform has secured support from 25 wholesale investors for its CPOF vehicle.
In the latest raising, the fund won new support from a major Japanese investment group.
The unlisted fund’s base includes Australian, South Korean and European investors.
The fund now expects to complete the balance of its overall target of $500 million in capital raising to be completed during the 2018 financial year.
It delivered a 19.2 per cent return in the 2017 financial year, making it the top performing multi-asset fund in the MSCI/IPD Australia Wholesale Property Funds Index for the past one, two and three-year periods.
The fund has 21 office properties. More than 80 per cent of the portfolio is based along the eastern seaboard. It has an occupancy level of 98 per cent and an average lease expiry of 6.4 years.
A proportion of the fund property exposure is earmarked for development, including the $600 million Wesley Place project on Lonsdale Street.
The landmark project is expected to proceed after Charter struck pre-commitment agreements with two super funds, Cbus and Telstra Super, to take up anchor tenancies in the 55,000-square-metre tower.
Last month Charter Hall also secured a third tenancy agreement with investment services firm Vanguard for the proposed tower, adding to its feasibility.
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