Deals

Beacon acquires Charter Hall US portfolio for $1.7bn

The Sydney-based REIT has sold its portfolio of 14 US office properties to Beacon Capital Partners as part of its plan to focus its efforts on Australian properties.

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Beacon Capital Partners has acquired 14 office properties from the Australian real estate investment trust, Charter Hall Office REIT, in a $1.71 billion deal.

The Boston-based private equity real estate firm fought off competition from up to 13 other public and private real estate firms, including AREA Property Partners, Boston Properties and Highwoods Properties, which were all invited to bid according to a previous report by Bloomberg. 

Charter Hall said in a statement it expected to make $575 million in profit from the deal after transaction costs and the repayment or transfer of debt, with the capital being used to pay sale to unit holders. Beacon Capital declined to comment on the deal.

The sale of the 14 US office properties is part of Charter Hall's plan to focus exclusively as an Australia-focused property company. Charter Hall chief executive officer Adrian Taylor said that after the sale closes the firm's portfolio would be valued at A$1.9 billion (€1.4 billion, $2.04 billion). The sale price represents a $35 million or two percent premium to the 31 December 2010 book value of $1.67 billion. The closing price is in line with the 30 June 2011 independent valuations, Charter Hall added. 

“Looking forward, we will remain focused on selective asset acquisition and portfolio composition strategies to maximise the income and capital growth of the Australian portfolio and will retain conservative gearing of 25 percent to 35 percent,” Taylor added. 

This is not the first time in recent months that an Australian-based real estate investment firm has retrenched from its US or European footprint. As PERE reported in July, ING Real Estate Community Living Group agreed to sell a 50 percent stake in a portfolio of US independent supportive-living communities to Ontario-based senior housing REIT Chartwell Seniors Housing for $169 million. The sale was in line with the Australian senior housing fund's strategy to concentrate on the Australian retirement market. Additionally, in March, Australian retail property firm Centro Property Group sold its US assets to The Blackstone Group for $9.4 billion.