Charter Hall acquire 100% stake in Sydney's Telstra building

Charter Hall has taken a 100 per cent interest in the Sydney CBD tower block currently leased to Telstra.

Their Charter Hall WALE Limited, a responsible entity of the Charter Hall Long WALE REIT, has paid $281.5 million for the 76-78 Pitt Street building, which will be leased back to Telstra on a 10-year, triple-net agreement at a yield of around 4.75 per cent.

Telstra will see a fixed annual rent increase of 2.5 per cent.

Avi Anger, fund manager of CLW, said the property has a high underlying land value and future optionality.

Charter Hall's REIT has also entered in to an agreement to take a 100 per cent interest in a new Bunnings property to be developed in CABOOLTURE, in Queensland's Moreton Bay region, for $28.1 million.

The REIT have also announced they've completed the acquisition of a 49.9% interest in an Endeavour Group leased pub the Parap Tavern in Darwin, paying for $9.8 million.

“Bunnings CABOOLTURE and the Parap Tavern are located in strong trading areas and identified growth corridors for Bunnings and Endeavour Group," Anger said.

"The acquisitions increase the proportion of triple net leases in the portfolio from 50% to 53% and increase the proportion of fixed rent reviews to 55%, further supporting the REITs secure and growing income.

"The Acquisitions also increase CLW’s exposure to high quality tenants in Telstra, Endeavour Group and Bunnings.”

The REIT will undertake a fully underwritten $250 million institutional placement to partially fund the acquisitions and associated transaction costs.