Charter Hall has confirmed its purchase of the Geoscience Australia building in Symonston for a record $363.5 million.
The deal smashes 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, which has been on a buying spree in the national capital, confirmed the acquisition of this “unique social infrastructure asset” in a statement to the Australian Stock Exchange.
The deal was first reported in June, and Charter Hall has been conducting due diligence before settlement.
The purpose-built A-grade 31,053 square metre office building on 1.6 hectares at Symonston is fully leased to Geoscience Australia and was listed for sale in February.
Its previous owner, German-based funds manager Real IS, paid the Motor Trades Association $234.1 million for the property in 2006.
The 24-year-old Geoscience property offered a long-term, AAA-rated income profile; fixed income growth and attractive yield; and a significant landholding positioned along major arterial roads.
The purpose-built nature of the asset for Geoscience Australia provides strong retention prospects, as well as infrastructure within the property.
“The property comprises a specialised life sciences complex of 32,659 sqm of lettable area across three separate buildings including office, specialised laboratory and storage, warehousing, childcare facilities and parking for 652 vehicles,” Charter Hall told the ASX.
“The building incorporates leading ESG (environmental, social and governance) principles featuring a geothermal heat pump system and has achieved a Climate Active Carbon Neutral certification.
“Since construction, significant capital has been invested in ongoing tenancy upgrades, as well as installing critical infrastructure and an on-site childcare centre.”
A $15 million refurbishment of the complex, including fit-out of four levels and updating Greenstar and NABERS requirements, was completed in 2019.
The complex, which houses 1500 staff, is strategically located near Parliament and can collaborate with Australia’s top Earth sciences program at the Australian National University.
It is highly attractive for its long and secure lease, which runs until 2032.
Colliers and JLL handled the sale process.
Colliers state chief executive ACT, Paul Powderly said the property was a renowned building of national significance.
“This property is very special and we knew that based on the investment credentials it had the potential to achieve a record sales price,” Mr Powderly said.
“The Geoscience Australia HQ is arguably one of a kind.”
Colliers director of Capital Markets and Investment Services, Matthew Winter said the property presented an outstanding investment opportunity.
“There was strong interest in this asset received from a variety of domestic and international capital sources, demonstrating that Canberra continues to appeal globally as an attractive investment destination,” he said.
“Charter Hall has shown it recognises the strength of our market and the value it offers investors. This purchase further expands its growing ACT portfolio.”
The purchase fits with its Charter Hall’s strategy of pursuing secure, long-lease properties with a government tenant.
In the past year, Charter Hall has acquired the Louisa Lawson Building (Services Australia) in Tuggeranong; ActewAGL House in the city; the Doris Blackburn Building (Services Australia) in Forrest; 24 Wormald Street, Symonston (Attorney-General’s); 50 Marcus Clarke Street; and only last month the proposed new building in Barton for the Australian Tax Office (ATO).
It is also conducting due diligence on 21 Genge Street in the city, the current home of the ATO, for a reported sale price of $300 million.
The ATO plans to move in 2025 to the Barton site, where it has secured a 15-year lease.
Canberra’s commercial property market is running hot and industry sources say records have continued to fall over the past 12 to 24 months.