Property group Charter Hall has sealed a $290 million deal to acquire the current home of the Australian Tax Office in Civic from German fund manager Real I.S., adding another Canberra office tower to its burgeoning portfolio of government-tenanted properties in the national capital.
Charter Hall announced the acquisition of 21 Genge Street in early February, about five months after initial reports that it was conducting due diligence on the property, which also houses the Department of Veterans’ Affairs.
The group will however maintain its relationship with the Tax Office, developing its new $300 million headquarters at 15 Sydney Avenue, Barton with DOMA Group and Kenyon Investments.
The two-tower Civic property is in the heart of Canberra and adjacent to the Canberra Centre retail mall.
Charter Hall said the investment strategy was to extend the leasing value of the property and take advantage of the modern building’s large floor plates and ideal location directly opposite the 260-retailer Canberra Centre.
Charter Hall Office CEO, Carmel Hourigan, said Canberra’s office market was one of Australia’s most resilient with low vacancy rates for prime stock.
“Large floor plates within a two-tower complex provides flexibility in meeting customers’ needs,” she said.
Twenty-one Genge Street has strong sustainability credentials, including carbon neutral certification and a 5-star NABERS Energy rating.
The ATO announced last September that it would move its 2000 staff to the Barton site in 2025 on a 15-year lease.
Charter Hall Group Managing Director and Group CEO David Harrison said at the time Canberra’s low vacancy rates and the reliability of the Commonwealth as a customer were an attraction.
“We are delighted to extend our partnership with both DOMA and the Commonwealth Government as a long-term tenant customer, as we modernise our office portfolio and select low vacancy markets which will drive long-term growth for our investors,” he said.
In November Charter Hall confirmed it had paid a record $363.5 million for the Geoscience Australia building in Symonston, also from Real I.S.
The deal smashed the previous commercial property record of $335 million Charter Hall and partner GIC paid for 50 Marcus Clarke Street in the city, currently home to the federal Department of Education, the Department of Employment and Workplace Relations, and the Digital Transformation Agency.
Charter Hall also has on it books the Louisa Lawson Building (Services Australia) in Tuggeranong, ActewAGL House in the city, the Doris Blackburn Building (Services Australia) in Forrest, and 24 Wormald Street, Symonston (Attorney-General’s).