Singaporean sovereign wealth fund GIC and ASX-listed Charter Hall have formed a joint venture to buy a grade-A office building in Canberra for $335 million.
The 50 Marcus Clarke office building has more than 40,000 sqm of net leasable area and is located in a prime position in Canberra’s CBD.
The building, which is fully leased to a government tenant, also has a 5.5-star NABERS energy rating and a 6 Green Star rating.
GIC will hold a 95% interest in the property, while Charter Hall will acquire the other 5%.
“We are confident that the stability of Canberra’s office market, coupled with resilient, high quality tenancy demand makes this acquisition a strong investment,” said Kishore Gotety, Co-Head (Asia ex-China) of Real Estate at GIC.
“The Canberra market has performed well during COVID, with continued macroeconomic growth and low office vacancy.
Gotety said they expected steady office demand, underpinned by healthy employment growth and government demand going forward.
Charter Hall Managing Director and Group CEO David Harrison said the deal strengthened their 15-year relationship with GIC.
“We are also pleased to advance our relationship with the Australian Government as a major tenant customer, and further increase our exposure to Canberra’s growing office market as our office portfolio in Canberra approaches $1 billion,” he said.
CBRE’s Michael Andrews and Nic Purdue represented the vendor in the deal.
Andrews said Canberra had been a standout office market in 2021, with investment activity on track to hit a new record.
“We are currently tracking $1.17 billion in total office sales, which has completely eclipsed the decade average of $375 million, with another $300 million in sales in the pipeline,” he said.
“This coincides with Canberra recording its lowest vacancy rate since 2012 amid ongoing confidence in the local economy, despite the backdrop of COVID-19.”
The new partnership comes just days after GIC teamed up with ASX-listed SCA Property Group to create a $750 million joint venture to invest in Australian metropolitan convenience retail centres.
The new, unlisted SCA Metro Convenience Shopping Centre fund was seeded with seven assets from SCA’s existing portfolio worth $284.5m, representing a weighted average capitalisation rate of 4.84%.
There has also been a flurry of office transactions lately, with Singapore-listed CapitaLand Integrated Commercial Trust (CICT) acquiring two grade-A office buildings in Sydney for $330.7 million last week.
Singapore-listed Keppel REIT recently purchased a grade-A office development in North Sydney for $327.7 million, while Dexus sold a Sydney CBD office to Charter Hall’s prime office fund for $385 million.
Last month, ISPT bought the headquarters of Victoria’s Country Fire Authority in Melbourne’s eastern suburbs for $35.8 million, while Cromwell Property Group bought a 24-storey office building in Brisbane’s CBD for $184.7 million.
