Charter Hall Group and PSP Investments announce a further partnership

MONTRÉAL, Feb. 23, 2022 /PRNewswire/ - Charter Hall Group (Charter Hall or the Group) and the Public Sector Pension Investment Board (PSP Investments), one of Canada's largest pension investment managers, are pleased to announce that they have extended their 11-year relationship to acquire a development project under construction in Brisbane.

The property, located at 31 Duncan Street, within the fringe Central Business District (CBD) Fortitude Valley precinct, comprises a 25,000m² office development and a major 464-bay public carpark, currently under construction by national contractor Hutchinson Builders. The vendor has secured 70% leasing pre-commitments and will provide a rent guarantee over the balance of the space, with subsequent secured lease terms determining the final cost of the investment to the Charter Hall partnership.

The vendor is a private partnership that purchased the public carpark several years ago, gained planning approval for a new office building constructed above the carpark and secured several pre-commitments to bring total pre-leasing to approximately 70% of forecast income on completion. The vendors include Brisbane property identities Andrew King and Tim Mahony. Committed tenants include Urban Utilities, CS Energy, Hutchinson Builders, RPS, CoreLogic and Secure Parking.

Due for completion in December 2022, the new office building will be multi-tenanted and is located within 200 metres of the Fortitude Valley train station and within convenient walking distance to nearby retail and hospitality amenities, and the CBD.

Project features

The building offers a range of sustainability features, including natural ventilation and operable windows, as well as efficient plant and equipment which support the building in achieving its target design ratings of NABERS Energy 5.0 star and NABERS Water 4.0 star at completion. The building will be powered by 100% grid supplied renewable electricity, supporting a shared commitment by the partnership in taking climate action and contributing to a global low-carbon economy.

"Large 2,000m² floor plates, retail facilities and high-quality end-of-trip facilities combine to provide an excellent investment proposition," said David Harrison, Charter Hall Group Managing Director and CEO.

The Charter Hall and PSP Investments partnerships

Mr. Harrison noted that "Charter Hall and PSP Investments have partnered for over 10 years on various investments in Australia, including the following partnerships:

1. Charter Hall Office Trust (CHOT) – a national $3.75 billion prime office portfolio
2. BSWF Partnership (BSWF) – a $1.3 billion prime office portfolio
3. 242 Exhibition Street partnership – the $930 million Telstra global HQ located in Melbourne CBD
4. Development and subsequent divestment of the $250 million BOQ anchored office building in Newstead
5. Investment and subsequent divestment of an interest in the $200 million Bateau Bay shopping centre."

"We are pleased to extend our long-term relationship with Charter Hall and look forward to expanding our real estate investments in Australia," said Stéphane Jalbert, Managing Director, Head of Asia-Pacific and Europe, Real Estate Investments, at PSP Investments.

"We have invested in the Australian real estate market for over 10 years and look forward to exploring further opportunities that respond to evolving needs in terms of building flexibility and sustainability, while also offering an attractive risk-adjusted return."

Practical completion of the development is scheduled for late 2022, whilst settlement of the acquisition will take place in February 2022, having secured Foreign Investment Review Board approval.

Charter Hall Group (ASX: CHC)
With over 30 years' experience in property investment and funds management, we're one of Australia's leading fully integrated property groups. We use our property expertise to access, deploy, manage and invest equity across our core sectors – Office, Industrial & Logistics, Retail and Social Infrastructure.

Operating with prudence, we've curated a diverse $61.3 billion portfolio of 1,506 high-quality properties. With partnership at the heart of our approach, we're creating places that help grow communities; turning them into the best they can be and unlocking hidden value. Taking a long-term view, our $9 billion development pipeline delivers sustainable, technologically enabled projects for our customers.

Charter Hall has also extended its Fund Management capability into another asset class with the 50% acquisition of the $18.2 billion listed equities Fund Manager Paradice Investment Management (PIM), which invests on behalf of wholesale and retail investors across domestic and global listed equities.

The impacts of what we do are far-reaching. From helping businesses succeed by supporting their evolving workplace needs, to providing investors with superior returns for a better retirement, we're powered by the drive to go further.

About PSP Investments

PSP Investments is one of Canada's largest pension investment managers with approximately C$204.5 billion of net assets as of March 31, 2021. It manages a diversified global portfolio of investments in public financial markets, private equity, real estate, infrastructure, natural resources and private debt. Established in 1999, PSP Investments manages net contributions to the pension funds of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit www.investpsp.com or follow PSP Investments on Twitter and LinkedIn.  

SOURCE PSP Investments