Charter Hall’s Prime Office Fund Completes $340m Equity Raising

Charter Hall has announced that its $3.5 billion Charter Hall Prime Office Fund has completed a first close equity raise of $340 million within eight weeks of its launch.

The group said the raising generated strong interest from both local and offshore existing and new investors seeking exposure to the unlisted office fund’s portfolio.

The equity raising, has further enhanced CPOF’s balance sheet, and will enable it to fund CPOF’s active development pipeline of circa $1.5 billion predominantly located within the eastern seaboard CBD office markets.

“Global investment conditions remain favourable for the Australian commercial property market, which is competitive for high quality long leased investment assets,” Charter Hall Group’s chief executive, office, Adrian Taylor said.

“We are seeing continued demand from investors who are seeking investment managers with a proven track record and origination capability who can provide access to high quality core real estate.

“This raising has been well supported by both domestic and offshore investors with more than 25 wholesale investors partnering with the Group in CPOF.”

[Related reading: Charter Hall Fund Acquires Prime Canberra Office Building]

The fund provided investors with a 19.2 per cent return in fiscal year 2017, and has been the top performing multi-asset fund in the MSCI/IPD Australia Wholesale Property Funds Index across the office sector over the past one, two and three year periods to September 2017 and was the best performing multi-asset fund in the index over the last 12 months across all sectors.

CPOF fund manager Matthew Brown said that the fund is well-placed to grow its portfolio.

“The combined impact from both equity raisings and prudent capital management initiatives will see the Fund continue to focus its attention on office markets in the well performing eastern seaboard states, where it has a strong pipeline of develop to hold opportunities.”

[Related reading: Charter Hall's $450 Million Brisbane Square Office Tower]

CPOF’s prime-grade portfolio of 21 office properties is well positioned with over 80 per cent located in the strong performing eastern seaboard states with an occupancy level of 98 per cent and an average WALE of 6.4 years.

The fund’s portfolio has a weighted average asset age of just 9 years and strong exposure to high-quality tenant covenants with 99 per cent of income from investment grade, government or nationally recognised tenants.

Interest in the balance of CPOF’s target equity raising of $500 million is strong with expectations the balance of the capital raising will be completed during the 2018 financial year.