This week, both Charter Hall and Folkestone announced acquisitions for their unlisted property funds.
Charter Hall will acquire 44 Sydney Avenue, Forrest ACT, a 9,950 sqm office building, for $58.6M from fund manager Quintessential Equity. The property is anchored by the Department of Foreign Affairs and Trade, with a WALE of 7.9 years and a 4.5 Star NABERS Energy rating. Charter Hall intends to place the property in its recently relaunched Direct PFA Fund, which has raised $80M over the past three months. The Direct PFA Fund is currently open to investors and is targeted yield of 7.25% p.a.
Folkestone announced it will launch a new Green Square Hotel Fund to acquire a hotel under development at 18 O’Riordan St, Alexandria NSW. The acquisition was made from GS Hotel Development Pty Ltd (developer), a joint venture between Folkestone Limited and Veriu Hotel and Suites. The fund is seeking to raise $23.2M of capital, targeting a 7% yield and an IRR of 12.6%. The 144-room hotel is expected to open in July 2019. Core Property expects the Fund will receive significant demand from investors following Folkestone’s recent $50M capital raising for its Sydney Airport Hotel Fund, which was oversubscribed.
Asia Pacific Data Centre Group (ASX: AJD) fell 11.5% during the week, after 360 Capital Group’s (ASX: TGP) all-cash takeover offer of $1.95 lapsed earlier in the week. As it stands TGP owns 67.3%, while NextDC (ASX: NXT) the tenant and underbidder, owns 29.2%. The remaining 3.5% is held by around 380 minority securityholders. Core Property expects AJD’s price may continue to be weak whilst uncertainty remains over its ownership structure between TGP and NXT.