This article is from the Australian Property Journal archive
REDHILL Partners is expecting up to $80 million for one of Perth’s biggest city office tower offerings of the year, with 45 St Georges Terrace hitting the market after an intensive re-leasing program.
The 12 level CBD tower has over 10,000 sqm of office accommodation occupied by the Commonwealth government, Citic Pacific, Amcom and SpaceCubed Coworking, with a weighted average lease expiry of 4.45 years and fixed annual rent reviews.
About 5,000 sqm of the building has been leased in the past six months.
It includes nine levels of office accommodation and two levels of basement providing 31 car bays plus secure vault storage.
Redhill is hoping to turn a tidy profit on the asset, for which it paid just over $53 million three years ago.
JLL’s John Williams and Nigel Freshwater have been appointed to the expressions of interest campaign.
Williams said investors would be attracted to the building because of its full occupancy and prime CBD location within a market forecast to outperform.
“The building has also recently proven to be highly successful in the Perth market. Since 2018 three new tenants have committed to new leases in the building and the anchor tenant has renewed its lease.”
“The investor market is looking for security of income and this success proves the assets position in what was a challenging leasing environment.”
Freshwater said the building comes to the market at a point in time where there is strong demand from investors.
“The Perth value proposition is now very compelling for countercyclical investors with the Perth Sydney prime equivalent yield spread currently sitting above 150 basis points. Perth office assets are currently highly sought after by investors confident that the Perth CBD market is improving rapidly, driven by strong economic fundamentals in the Western Australian economy, he added.”
Investment activity has been gaining momentum in Perth’s CBD office market. Major deals have included AMP Capital Diversified Property Fund offloading the 140 St Georges Terrace office tower and Singapore’s sovereign wealth fund GIC taking a 25% interest in the future Chevron headquarters on the Swan in a deal believed to have come in at about $220 million.
Redhill also owns the 20-storey BGC Centre in the Perth CBD, which it bought for over $100 million late in 2019.
45 St Georges Terrace is close to the junction of St Georges Terrace and Sherwood Court, and the Elizabeth Quay project is within easy walking distance, as is the Hay and Murray Street Mall retail precincts.
Expressions of interest close 5th August.
