Charter Hall’s Diversified Property Fund and the newly launched Core Plus Industrial Fund have jointly bought the Coles Myer distribution centre in Perth for $155 million.
DPF has bought a 25% stake in the project for $38.8 million with the remaining 75% snapped up by CPIF for $116 million.
The new Coles Myer distribution centre will be located adjacent to Perth Airport and will have a total lettable area of 72,834 sqm. CML has signed a 20 year with an annual 2.75% rent review.
The project is expected to be complete in December 2007.
The development is being completed by a joint venture with Australand and CIP, which has taken construction and delivery risk.
Charter Hall Listed Property Trust is facilitating this acquisition on behalf of the new CPIF, which is expected to be held by wholesale investors with a co-investment by Charter Hall Property Trust.
Charter Hall’s joint chief executive David Harrison said the acquisition is expected to be earnings accretive for the Charter Hall Property Trust in Financial Year 2007 as progressive development payments attract an interest coupon of 8% per annum.
“The launch of Core Plus Industrial Fund further demonstrates Charter Hall’s commitment to the wholesale sector. Charter Hall Property Trust’s co-investment is an opportunity to participate in the attractive distribution growth potential generated from a co-investment in Charter Hall’s series of Core Plus funds,” he added.
CPIF is targeting a portfolio size of $500 million to $700 million.
Meanwhile, the purchase will increase DPF’s total investment to $87 million with interests in New South Wales, Queensland and Victoria.
The acquisition will increase the weighted average lease term across the DPF portfolio to 11.6 years.
Charter Hall’s DPF remains on track to deliver its FY07 forecasts.
By Adam Parsons
