Charter Hall Prime Office Fund has bought the freehold interest in the Collins Place precinct in the Melbourne’s CBD, eyeing an opportunity to unlock under-utilised floorspace in the prime location.
Located at the ‘Paris end’ of the CBD, Collins Place sat on a 13,350 sqm site with about 140,000 sqm of floor space across two towers, including 100,000 sqm of A-grade office space plus the Sofitel Hotel.
CPOF purchased the Collins Place freehold title from an institutional investor.
The AMP Wholesale Office Fund owns the leasehold of Collins Place, representing the fund’s largest single asset.
Charter Hall Managing Director and Group CEO David Harrison said Collins Place presented a unique opportunity to secure one of the largest, freehold title, prime CBD sites nationally.
“We have long recognised the value of freehold land and precincts, demonstrated by the 2019 purchase of Sydney’s premium office precinct, Chifley Tower and the subsequent planning process to develop a complimentary South Tower to the existing North Tower,” Harrison said.
“Charter Hall’s strategy, to unlock under-utilised floorspace in prime locations that have the potential to add value to the freehold asset over time, ultimately delivers long-term value.
“Equally, at a modest plot ratio of approximately 10:1, we believe Collins Place is significantly under-utilised compared to nearby precincts, such as 80 Collins Street, which secured approval to develop an additional tower to complement the 50-storey Nauru House, to create a 20:1 plus plot ratio.”
Charter Hall had also secured planning approval for a twin tower precinct further along at 555 Collins Street, which would accommodate 86,000 sqm on a site of 3,300 sqm equating to approximately 24:1 plot ratio.
Harrison said the purchase added to their Paris end footprint, including the 9,000 sqm Southern Cross site; the 10,000 sqm Wesley precinct; the 7,000 sqm 242 Exhibition Street site; and the 5,000 sqm site at 11 and 288 Exhibition Street.
Colliers’s Adam Woodward negotiated the sale on behalf of the vendor.
Charter Hall Prime Office Fund recently bought a 50% stake in the Southern Cross Towers precinct in Melbourne’s CBD from Brookfield and Blackstone.
Other Melbourne CBD office deals included CDL and HThree City Australia’s purchase of the A-grade office tower at 330 Collins Street for $236 million last month and CapitaLand Investment’s purchase of the 22-storey office tower at 120 Spencer Street.
In February, Singapore-listed Straits Trading Company bought two office buildings in Docklands for $150 million, and Hong Kong-listed Link REIT entered into a $596 million deal with Oxford Properties to invest in an office portfolio including the 567 Collins Street building in the Melbourne CBD.