This article is from the Australian Property Journal archive
FOLLOWING a $62 million refurbishment, the A-grade William Square office building in Perth’s inner suburb of Northbridge has hit the market with expectations of more than $170 million.
Knight Frank’s Todd Schaffer and Cushman & Wakefield’s Mark Hansen are marketing he six-storey, 23,000 sqm building at 235 William Street which includes more than 1,200 sqm of retail space.
It currently returns around $10.2 million, and north of $12.4 million fully-leased, and is currently 94% occupied by income from long-term state and federal government tenants.
Upgrades to building included a new façade, improved facilities, and expansive investment in tenant fit-outs.
Schaffer said the building is highly appealing to tenants due to its large 3,400 sqm to 4,100 sqm floor plates, and location just 500 metres from the centre of the Perth CBD.
“Even with such exceptional facilities the building’s outgoings are still 40% lower than CBD benchmark rates.”
Hansen said William Square is the highest profile office building in Northbridge and would benefit from around $6.1 billion of current and planned government and private investment in the area including Yagan Square, the Cultural Centre and Perth Museum.
“It is a solid, blue-chip asset for sale at a time when the Perth office market is showing encouraging signs of improvement, with the Perth-Sydney yield spread widening to 200+ basis points; 70 basis points wider than the 20-year long-term average.”
The offering comes in a period of heightened transactional activity throughout the central Perth market, and is primed to be one of the largest office deals in the city over the past couple of years.
Last month, Growthpoint confirmed its first office asset acquisition in Perth with the $91.3 million acquisition of Investa Office Fund’s six-level, A-grade building of 11,973 sqm at 836 Wellington Street in West Perth, fully leased to the federal government.
The asset traded at a 6.25% yield, and is used as offices for the Department of Home Affairs.
That was quickly followed by WA-based Acure Asset Management’s $130 million purchase of the A-grade Optima Centre in the Herdsmen Business Park from Blackrock. Fully-leased, the dual-building complex has 16,116 sqm of office space and returns around $9.03 per annum net, with the WA government occupying around 83% by area on a recently renewed 15-year lease.
According to Ray White Commercial’s Between the Lines report, Perth office sales grew by 15.89% to $883.99 million over 2017/18, driven by a number of high value transactions.
Transactions of $100 million-plus over the past year have also seen GDI’s acquisition of Westralia Square at 141 St Georges Terrace, for $216.25 million, Primewest’s $175 million purchase of 1 William Street at on behalf of Singapore sovereign fund GIC, and Elanor Investors Group picking up Workzone West at 202 Pier Street from Charter Hall Direct WorkZone Trust for $125.22 million.
Meanwhile, the 4,586 sqm, eight-level boutique office building at 8 St Georges Terrace in the CBD’s is currently being marketed. It was built in 1989 and upgraded in 2010, and has 17 car bays.
Australian Property Journal
