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News release


Local Government House settles for $11.5 million after strong sales campaign

Private investors, syndicates and owner-occupiers vie for 2,300sqm four-level West Perth building.

PERTH, 3 July 2013 – Predictions of strong investor interest in the WA Local Government Association’s current home in West Perth have proven correct, with Jones Lang LaSalle announcing the property’s sale for $11.5 million to two local private investors.

Director of Sales and Investments, Tom Nattrass said the 2,300sqm Local Government House at 15-17 Altona Street attracted more than 60 enquiries resulting in 20 inspections and four formal offers.

“Although the source of the enquiries, namely private investors, local syndicates and owner occupiers was anticipated, the extent of interest combined with the fact that the transaction took just two months to complete certainly underscores the longstanding appetite from investors for properties in this precinct,” he said.
“We are seeing continued demand from investors for well-located assets, particularly those in the sub $20 million bracket,” Mr Nattrass said.
The Association will be relocating to new purpose-built premises in West Leederville at the end of this year and will continue its existing lease-back arrangement with the property’s new owners until January 2014.
Mr Nattrass said the transaction presented a significant value-adding opportunity in terms of a co-ordinated refurbishment and repositioning campaign which he understood would commence later this year under the direction of the new owners.
The last substantial vacant possession transaction in West Perth occurred two and a half years ago with the $23.75m sale of the former Argyle Diamonds building at 2 Kings Park Road. The buyer then refurbished the building and re-tenanted it following a very successful leasing campaign.
The four-level Local Government House building, which is also tenanted by insurance broking company LGIS, features a substantial 40m frontage, 61 car bays and three residential units on the top floor.
Mr Nattrass said that although prime net effective rents had stabilised at about $500 per sqm pa over the last 12 months, the current medium term prognosis for the area remains positive.
Jones Lang LaSalle Senior Research Analyst, Anna Garvey, said the firm’s latest research indicated that office completions would decline from a projected peak of 11,400sqm this year to just 4,600sqm in 2014, some 42 per cent below the five year annual average of 8,000sqm.
“Although vacancy rates increased in the first half of 2013 almost half of the projected completions in West Perth are pre-committed while at this time there are no confirmed approvals for development after 2014,” she said.