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News release

Perth

$27.6 million bottom-line for Stockland on top-of-the-Terrace offices

Prime West secures 255 and 267 St Georges Terrace offices in Financial Year’s first transaction


PERTH, 14 August 2012 – Perth’s supply-starved CBD office market has recorded its first substantial sale of the new financial year with WA syndicator and developer, Primewest securing two low-rise office buildings at the western end of St Georges Terrace.

The former Stockland assets at 255 and 267 St Georges Terrace were sold in a $27.6 million transaction after an expression of interest campaign conducted by Jones Lang LaSalle.
 
John Bond, Director of Primewest, commented that this was a strategic acquisition given the Company’s ownership of the adjoining property at 251 St Georges Tce, purchased in November 2011 for $61.3m. Mr Bond added that the securing of 251, 255 and 267 St. Georges Terrace now provides Primewest with approximately 130sqm of frontage to Perth’s premier office thoroughfare, covering the corner of Mount Street westward to the top of St Georges Terrace. Further, the three buildings provide substantial number of car bays with average ratios of 1 car bay per 88 sqm of NLA. 

With Perth’s tight office leasing conditions set to continue for at least the next 5 years, Primewest’s latest acquisition can facilitate a substantial future development site within the prized elevated end of the Terrace. This deal reflects Primewest’s assertive growth within CBD’s across Australia.
 
Jones Lang LaSalle’s Head Of Sales and Investments Nigel Freshwater who negotiated the deal with the company’s Director of Sales Phillip Fogliani said the sale incorporated a four level 3506sqm (NLA) north-facing St Georges Terrace property and rear two-level 625sqm (NLA) building, both atop a two-level 86 bay secured basement carpark.

The properties are registered on separate titles covering a combined area of 2486sqm.
Mr Freshwater said, “ The sale was only the second so far this calendar year and the agreed price reflected burgeoning demand for high-grade, quality tenanted CBD office assets. The analysis of the latest sale reflected an initial yield of 9.08% and was in-line with market expectations."
 
“Interest in the property was very strong from the outset with several competitive bids received from local syndicates, as well as eastern states and South East Asian buyers. We have seen increased interest in the Perth market with many offshore and interstate groups visiting Perth to be briefed and see first hand the business activity in the city. The offering of 255 & 267 St Georges Tce to the market was the first chance for them to act and the response confirmed a genuine intent to invest in Perth. ” He added.
 
The only other substantial office sale recorded since January 1 involved Charter Hall Funds paying $96million to Wyllie Group in an off-market transaction for the remaining 50 percent of the 20-level St Georges Square office building at 225 St Georges Terrace.

Jones Lang LaSalle recently reported that the Perth CBD recorded net absorption of 64,000sqm during the March quarter, and although headline vacancy rates had ticked up from 2.0 per cent to 2.9 percent there was currently only 8,633sqm or 0.5 per cent of total stock under construction.
 
Mr Freshwater said that CBD capital values had grown 13.1 per cent in the year to June 30 and some 22.9 per cent since the market’s GFC nadir in September 2009.

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