GIC, Charter Hall JV acquires A-grade office building in Parramatta, Sydney

SINGAPORE'S sovereign wealth fund, GIC, has entered into a joint venture (JV) partnership with Australia-listed property group, Charter Hall, to acquire an A-grade office building in Sydney for an undisclosed sum.

The Jessie Street Centre in Parramatta CBD (central business district), Sydney has a net lettable area of 53,900 square metres (sq m) and provides retail offerings as well.

The property is 99.9 per cent occupied with a WALE (weighted average lease expiry) of 3.9 years. It is mainly leased to the Australian Taxation Office, AMP Services, as well as various New South Wales (NSW) Government Service tenancies.

David Harrison, group managing director and CEO of Charter Hall Group, said: "This strategic acquisition further strengthens a well-established 15-year partnership with GIC, who recognise our strong track record of creating institutional quality investment opportunities that we can add value to utilising the second-largest office platform in Australia.

"We are also proud to advance our relationship with the Australian Taxation Office as a major tenant customer, which further increases our exposure to the Australian government, and also the NSW government across our office portfolio."

In a press statement released on Tuesday, GIC said the property will benefit from significant developments and infrastructure projects within the precinct.

These include Parramatta Square, the recent completion of Stage 1 of WestConnex Motorway, the Parramatta Light Rail project to be completed in 2023, and the recently announced Sydney Metro West rapid rail to the Sydney CBD, which will reduce travel times between the two CBDs.

Lee Kok Sun, chief investment officer at GIC real estate, said: "Parramatta is expected to benefit from Sydney's forecast population growth and planned infrastructure enhancements such as a new metro line to the Sydney CBD and a light rail link.

"As a long-term value investor, we are confident this asset will generate resilient, income-driven returns. We look forward to strengthening our partnership with Charter Hall through this transaction and working together to add value to this asset."

Trent James, fund manager at Charter Hall, noted that this is rare opportunity to acquire a high quality, A-grade office asset situated on a 13,530 sqm site within the Parramatta CBD.

He added: "The ongoing transformation of Parramatta will see it as a genuine second CBD, and is likely to surpass North Sydney as Sydney's largest metropolitan CBD market. This investment demonstrates our ongoing long-term support of Western Sydney."

BT understands that Charter Hall has about A$37 billion (S$35 billion) of assets, of which A$18 billion is in office assets. Meanwhile, GIC manages "well over" US$100 billion in assets under management.