CHARTER Hall’s Direct PFA Fund has acquired an inner Sydney office campus leased to the University of New South Wales for $80.15 million, extending its partnership with the organisation soon after topping out their new Parramatta hub.
UNSW occupies the entirety of the 10,685 sqm, seven storey building at 221-227 Anzac Parade in Kensington, with 10.75 years remaining on its triple net lease term. The building was constructed in 2005 on a 2,466 sqm site that is located directly opposite UNSW’s Kensington campus, and close to the new south east light rail line.
The lease includes fixed annual increases of 3.0% and multiple term options.
“This additional university-leased asset expands our exposure to higher education and the life sciences sector which we see as a key growth component of our social infrastructure strategy which has grown beyond $3 billion in assets,” Charter Hall group managing director and chief executive officer, David Harrison said.
“We welcome another relationship with UNSW, extending our broader university relationship exposures.”
Charter Hall, UNSW and Western Sydney University are currently developing a $300 million engineering and innovation hub in Parramatta, where some 27,000 sqm of space will be delivered and occupied by the two providers. The project topped out in February.
Charter Hall and WSU previously delivered a 26,500 sqm vertical campus at One Parramatta Square, and are working on the $350 million Westmead Innovation Quarter precinct, where they have secured the CSIRO as a major tenant for the 43,000 sqm hub.
“The opportunity to invest in the UNSW L5 Building is consistent with PFA’s strategy of acquiring assets with a long leases to strong tenant covenants,” Charter Hall Direct chief executive officer, Steven Bennett said.
PFA’s office portfolio has over 60% exposure to government tenants.
Charter Hall Direct PFA Fund now comprises a $1.8 billion portfolio of 18 investment properties, with a weighted average lease expiry of 7.8 years and 98% occupancy.
The off-market deal for the Kensington building was brokered by JLL’s Luke Billiau.