Charter Hall are ramping up their acquisition activities as the group continues to aggregate property across their range of funds prompting JPMorgan analysts to upgrade the property fund manager’s projected haul of performance fees over the next five years.
Charter Hall has been in talks with GIC to acquire a $900M half-stake in the leasehold of the Chifley Tower and Plaza reflecting a yield of under 4.5 per cent. The leasehold runs out in June 2113, however CHarter Hall's Prime Office Fund acquired the freehold interest in December 2018 for $98M.
GIC had attempted to sell the tower last year, however many large institutions were not prepared to deal with a leasehold interest, placing Charter Hall in the box seat for the acquisition.
Charter Hall & GIC has also been linked to a half stake in Telstra’s Melbourne headquarters at 242 Exhibition St as Oxford Properties Group weighs up selling its interest in the $800m complex.
In Brisbane, Charter Hall are backing a plan by the Morris Property Group’s to attract the ATO to its $250M 152 Wharf Street project. The ATO have been in the market for 20,000sq m. The Morris Property Group have proposed a 27-storey commercial tower after dropping an earlier plan for a 197-unit tower on the site.The new commercial scheme features 24,416sq m with ground floor retail and 20 levels of A-grade office space.
On the industrial front, Charter Hall are also buying a 6.18ha site in Eagle Farm that has a 19-year lease to Brisbane City Council. The site in Schneider Road is a bus depot and spins off a net income of $5.2m and has rent reviews of 2.5 per cent.The triple net lease property, being traded via CBRE, could be bought for about $105m.
Charter Halls assets under management are expected to swell to as much as $52 billion over the next five years, a revision upwards from $48 billion. According to JP Morgan, the listed manager could invest as much as $680 million of its own equity into its funds, up from $480 million, and book $265 million in performance fees, up from $245 million, according to JPMorgan.