Charter Hall Office Sells All U.S. Portfolio for $1.71 Billion to Beacon

Charter Hall Office REIT (CQO) agreed to sell its U.S. assets for $1.71 billion to entities affiliated with Beacon Capital Partners as it completes its plan to focus on Australian properties.

Sydney-based Charter Hall Office said it expects net proceeds of about $575 million after transaction costs and the repayment or transfer of debt. The trust plans to pay the proceeds of the sale to unit holders, it said in a statement to the stock exchange today.

Charter Hall Group last week won shareholder support to remain the responsible entity and manager of the office trust, defeating a bid by its biggest shareholders to remove it. The group said then it will continue with the sale of the office REIT’s U.S. properties and run the trust as an Australia-only vehicle.

Completing the sale in “an increasingly volatile global economic market is seen as a compelling risk adjusted outcome for unitholders,” independent Chairman Roger Davis wrote in the statement today.

Bank of America Merrill Lynch led the sale process, where a group of 13 shortlisted parties were invited to undertake due diligence and submit formal bids for the purchase of all or some of the U.S. portfolio. Charter Hall Office REIT’s U.S. assets comprise 14 office properties.

AREA Property Partners, Boston Properties Inc. (BXP) and Highwoods Properties Inc. (HIW) also made bids for some or all of Charter Hall Office’s U.S. properties, people with knowledge of the bid told Bloomberg in May.

After the sale, the REIT will have office assets in Australian capital cities with a book value as at June 30 of A$1.9 billion ($2.05 billion), Chief Executive Officer Adrian Taylor said.

The shares were halted from trading today and closed yesterday at A$3.30, up 16 percent in 2011.

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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