03/12/2013 - 13:22

Property trusts chase $640 million

03/12/2013 - 13:22

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GDI Property Group and Charter Hall have formally launched investment offers this week, giving wholesale investors an opportunity to buy a stake in two major Perth office buildings.

Property trusts chase $640 million
The 15,000-square metre WorkZone West building has been valued at $124.5 million. Photo: Attila Csaszar

GDI Property Group and Charter Hall have formally launched investment offers this week, giving wholesale investors an opportunity to buy a stake in two major Perth office buildings.

GDI is raising $567 million to fund the acquisition of six commercial properties across Australia, including the recently refurbished Mill Green complex, comprising 197 St Georges Terrace and two adjoining buildings on Mill Street.

The Charter Hall Direct WorkZone Trust is aiming to raise up to $72 million to invest in a newly completed office building in Pier Street.

The 15,000-square metre WorkZone West building is fully leased to Leighton Contractors for a term of 12 years, and has been valued at $124.5 million.

The trust is offering investors a yield of 9.25 per cent for a two-year forecast period to March 2015.

Early investors who take up the offer before the end of February will get a bonus two units, lifting their yield to 9.36 per cent.

Developer Charter Hall is still seeking to fill the 12,000sqm WorkZone East building, which is half-leased to Leighton.

GDI bought the Mill Green complex in 2011 and has since invested $50 million on its refurbishment.

The three neighbouring buildings currently have an occupancy rate of 72.8 per cent with a weighted lease term of 4.4 years.

This ranges from 90.3 per cent occupancy at 197 St Georges Terrace, where the major tenants are engineering firm AMEC Minproc, Chevron, CBI Constructors and Clough Projects, to zero occupancy at the smaller 1 Mill Street building.

The other properties it is looking to sell into GDI Property Group, located in Sydney, Adelaide and Brisbane, have higher occupancy rates but shorter lease terms.

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