Charter Hall sells $50m Perth property to Centuria
Charter Hall has sold a fully leased A-grade office building in Perth to Centuria Metropolitan REIT for more than $50 million.
The deal reflected a passing initial yield of 8.6 per cent and a capitalisation rate of 7 per cent.
The 11,042sq m Hatch Building at 144 Stirling Street is predominantly leased to the Western Australian Government.
Centuria’s head of listed funds Nicholas Collishaw said the acquisition was in line with Centuria’s preference for long-term leases with strong tenant profiles.
“This is the second investment in Perth where Centuria Metropolitan REIT has not been represented.”
The sale was negotiated by Graham Postma, Paul Craig, Ben Azar and Barney Dear of Savills Australia and John Williams, Nigel Freshwater and Simon Storry of JLL who said there was a lot of interest from both local and offshore investors, including a number of competing REITS.
Development surge
“The area immediately surrounding has benefited from a recent surge of development, including several high quality commercial and residential developments such as Workzone, 130 Stirling Street, Oracle Apartments, as well as new cultural developments such as the Western Australian Museum and improvements in the nearby Northbridge entertainment precinct,” Mr Postma said.
According to John Williams of JLL: “The process confirmed the depth of interest in Perth office investments. Perth is now seen as exceptional value compared to other Australian capital cities. The active buyers also recognise that the Perth office rental market has reset and is likely to deliver income growth in the medium term. Consequently, we are seeing increasing levels of interest from eastern states based funds while offshore investors still remain active.”
The property has a weighted average lease expiry of 3.7 years and includes a 1563sq m warehouse.
