This article is from the Australian Property Journal archive
A 12-storey A-grade Perth CBD office building opposite the Elizabeth Quay precinct, and occupied by state government tenants including Development WA, has hit the market and could reportedly fetch around $85 million.
The 10,926 sqm tower at 40 The Esplanade is offered 91.6% occupied; as well as Development WA they include Genesis Minerals, Brunel, Department of Health and Aged Care, and the Aged Care Quality and Safety Commission.
The tower has 117 secure car parking bays and offers direct road and rail infrastructure access.
CBRE’s Aaron Desange and Nicholas Volk are managing the expressions of interest campaign, which closes 7th September.
Industry sources suggest the asking price is around $85 million.
“40 The Esplanade represents prime CBD real estate offering the flexibility to produce core-plus or value-add returns, which is a compelling proposition in the current marketplace,” Desange said.
“With vacancy upcoming within the building in 12 months’ time, an incoming owner can capitalise on Perth’s current economic upswing and strengthened occupier market.”
“As evidenced by the high-profile commitments by the likes of Chevron, Ernst & Young and Herbert Smith Freehills, the attraction of Elizabeth Quay will continue to draw occupiers towards the precinct, underpinning the asset’s future leasing success,” Volk said.
“The current leasing market backdrop is supportive, with physical office occupancy in Perth leading the country and nearly 39,000 sqm of gross leasing volume recorded in H1 2023 off the back of a record 226,000 sqm in enquiry.”
Perth’s CBD office vacancy inched upwards to 15.9% over the past six months, according to fresh Property Council of Australia data.
Formerly Wesfarmers House, 40 The Esplanade was sold by Orchard Funds Management to Ascot Capital in 2008 for around $85 million. Prior to that, Orchard (then SAITeysMcMahon) acquired the property in 2005 for $47.5 million.
The listing of 40 The Esplanade comes just days after a six-storey office building near the Elizabeth Quay precinct, 10 William Street, was put up for sale with a price tag in the mid $20 millions range.
It has 4,248 sqm of net lettable area and sits on a 1,560 sqm site. It is offered with 24% vacancy, which could potentially by 74% by the end of the year.
Office deals across Australia totalled $973 million in the June quarter, according to MSCI, a year-on-year plunge of 83% as buyers and sellers faced on values amid structural changes to the sector such as working from home.
