Charter Hall’s flagship Australian office fund has bought an asset in Sydney from Dexus for A$385m (€245m).

The Charter Hall Prime Office Fund (CPOF) bought the building at 383-395 Kent Street on an initial passing yield of 5.1%.

CPOF fund manager, Matthew Brown, said: “This strategic acquisition builds on CPOF’s portfolio of prime CBD assets, with multiple expansion and redevelopment options.”

Brown said the transaction supported the group’s strategy to acquire high-quality modern assets where it could successfully create major CBD precincts, given its prime location.

Charter Hall Office CEO, Carmel Hourigan, said the acquisition would lift CPOF’s total portfolio to A$9bn.

She said CPOF would continue to cultivate its develop-to-core strategies, with current developments under construction or in planning phases within four major CBD markets.

These projects had secured leasing pre-commitments from major customers, such as Amazon, Australia Post and Commonwealth Governments Services Australia.

Dexus said the sale price reflected a 1.3% premium to the last stated book value. Net sale proceeds would initially be used to repay debt.

Dexus chief investment officer, Ross Du Vernet, said: “This transaction is in line with our strategy of recycling out of some core properties and reinvesting into higher returning opportunities, including our sizeable development pipeline.”

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