Fund manager Australian Unity has confidence in Brisbane’s CBD market buying an 18-storey tower

AUSTRALIAN Unity Investment Real Estate has belief in the Brisbane CBD real estate market by paying $105.75 million for an office tower.

AUSTRALIAN Unity Investment Real Estate has banked on the continual improvement of the Brisbane CBD office market with the purchase on an 18-storey tower.

The fund manager, as the responsible entity for the Australian Unity Office Fund (AOF), has entered into an unconditional agreement to acquire the tower at 150 Charlotte St for $105.75 million.

The tower is in the heart of the Brisbane CBD and is 100 per cent occupied with a 5.7 year weighted average lease expiry, and over 75 per cent of the rental income is derived from Boeing Defence Australia and the Commonwealth Government.

Australian Unity Office Fund will pay $105.75 million for an office tower at 150 Charlotte St in the Brisbane CBD.

AOF fund manager Grant Nichols said the purchase was consistent with the fund’s acquisition strategy and will improve the portfolio’s position, including increasing its weighted average lease expiry, occupancy and lease expiry profile.

“In Brisbane we have now seen 10 consecutive quarters of positive net absorption to June 2017,” he said.

“This, coupled with the variance in capitalisation rate spreads between Brisbane and Sydney, makes the acquisition a compelling opportunity for investors in AOF as it nears its 18 month listing milestone.”

The sale of the refurbished 11,011sq m tower is part of the carve up of Singaporean fund manager TCA’s $700 million plus five-strong Australian portfolio which had been marketed by CBRE and JLL.

Malaysia’s CIMB and TCA bought 150 Charlotte St from Stockland for $56 million in 2012 in a complicated deal that included Walker Corporation in the mix. Since then CIMB sold its interests in TCA managed funds.

In conjunction with the acquisition, AOF is conducting an equity raising of about $50 million at a fixed price of $2.23 per unit.

Proceeds from the equity raising will be used to partially fund the acquisition of 150 Charlotte St with the balance funded via an extension to AOF’s debt facilities with a new $70 million, five year tranche.