Charter Hall leads race for Telstra data centres and telephone exchange

Telstra last year had a goal of raising up to $2bn through divestments to strengthen its balance sheet.

Property group Charter Hall is being tipped as the most likely buyer of Telstra’s Melbourne data centres and could also be shaping up as a key contestant for the Telstra telephone exchange building which is up for sale in Sydney.

As reported by The Australian last month, Telstra is working with real estate agency Knight Frank to sell the Pitt Street Telephone Exchange building, which some believe is worth about $300m.

Charter Hall was rumoured to have an option over the asset but this was never confirmed.

The Melbourne assets are expected to be worth about $600m.

Charter Hall and other local groups remain well placed to secure property assets in this market at a time that COVID-19 travel restrictions remain in place.

Already, Charter Hall is in exclusive due diligence to buy interests in petrol station sites from Ampol (previously known as Caltex), and is believed to be doing the on-the-ground work of assessing the sites.

Already, Charter Hall’s satellite trust, the Charter Hall Long WALE REIT, has purchased a near half-stake in a $1.4bn property portfolio from Telstra, so should it acquire the assets in Sydney and Melbourne, it will be a continuation of that relationship.

There are a busy few weeks’ ahead for Charter Hall, which is now vying for the real estate attached to the Qube Holdings’ Moorebank Logistics Park, as revealed by DataRoom online on Thursday.

Last week, it purchased the manufacturing sites owned by Owens Illinois for $215m.

The properties it has purchased includes sites at Spotswood, Melbourne, West Croydon, Adelaide and Penrith, Sydney.

Additional sale and lease-back deals are expected for Australian companies hoping to secure additional cash without debt.

Some have wondered whether Telstra will sell its mobile phone towers to raise capital, although most believe that the towers are core to the Australian listed telco and would be off limits.

Telstra last year had a goal of raising up to $2bn through divestments to strengthen its balance sheet. Non-core assets were all potential candidates for divestments as part of chief executive Andy Penn’s turnaround strategy.

Observers have believed Telstra would be interested in selling Pacnet, the Asian telecoms service provider it bought in 2014 for $US697m.

However, but it is thought that it never attracted the right price.

As well as the telephone exchange portfolio, Telstra has sold some data centres to Hutchison Global Communications owner I-Squared Capital, but that only netted the telco $160m.

Other asset sales tipped as being on the agenda at Telstra involve its healthcare IT assets.

It has sold its Silicon Valley-based company Ooyala, which it acquired in 2014 for $US270m.

In April, Telstra tapped the European bond market for $860m.

It has also secured an additional $940m of bank debt since mid-March

Telstra now has committed bank facilities worth $3.6bn.

The telecoms giant was given an A minus (stable) credit rating in April by credit rating agency S&P.