This article is from the Australian Property Journal archive
PRIMEWEST has acquired the A-grade ENI House office building from US giant Blackstone for $86 million, eight years after the asset was purchased by the South Australian Motor Accident Commission for what was then considered to be a bargain figure of $103 million.
In the new deal, the Western Australia-based fund manager acquired 226 Adelaide Terrace as a counter-cyclical play. It is fully leased to the federal government and corporate tenants including Wood & Grieve Engineers and ENI Australia Ltd.
Selling agents from CBRE and JLL said the campaign received significant interest from offshore and domestic investors attracted to the counter-cyclical nature of the asset.
The asset’s lease expiry profile was a major drawcard, providing ideal timing to capitalise on improving market conditions over the next two to three years, when the office leasing market will not only be more robust, but in a strong growth phase, they said.
CBRE Research shows Perth is expected to benefit from a strong spike in rental growth over the next five years – more so than any other Australian city. Over the next three years, premium net effective rents are forecast to increase by 56.3% and A-grade rents are tipped to lift by 41.6%, largely due to a reduction in incentives.
The Motor Accident Commission purchased the building with full occupation in 2011 from Salta Properties and First State Group, for well below the project value of $140 million.
Blackstone purchased ENI House from the Motor Accident Commission as part of an 11-asset portfolio nearly two years ago for $500 million.
Earlier this month, Oxford Properties offloaded a former Investa Office Fund office tower in the Perth CBD, at 66 St Georges Terrace, for $72 million. The 11-level, A-grade building of 11,444 sqm marked the first of the Canadian group’s portfolio optimisation program, in which it intends to sell off around $1 billion of non-core assets.
Oxford recently emerged successful in a long-running tussle with Blackstone for the Investa Office Fund, which saw the Canadian group take over the fund in a $3.4 billion acquisition.
On Perth’s city fringe, a two-level Burswood office building of 2,266, at 21-25 Teddington Road, is currently on the market through CBRE.
It has short-term leases to Openet and Abbott Australasia and 57 secure basement parking spaces, and is on a 2,295 sqm site that offers mixed-use redevelopment potential.
Australian Property Journal
