Perth's former department of transport building sells off-market for $22 million
A former Department of Transport building in the Perth CBD has sold off-market to a private equity firm for $22 million.
The eight-level vacant building, located at 441 Murray Street, had recently undergone a substantial refurbishment and was bought by Singapore-based private equity firm Redhill Partners in March.
The firm, which focuses on counter-cyclical commercial real estate investments within Australia, had recently bought 45 St Georges Terrace, Perth, for $53.5 million.
The sale of the Murray Street building, which is located one lot removed from the corner of Murray and Milligan streets and providing a total net lettable area of 5849 square metres, together with 39 secure car bays, was acquired from Centuria Property Funds.
The deal was negotiated by Axia Corporate property director of investment sales Wayne Mitsikas.
“The sale price for the property was reflective of both the quality of the asset and the belief that the take up of Perth CBD office space was genuinely trending upwards,” Mr Mitsikas said.
“The sale is win-win for both parties to the transaction. The buyer is perfectly placed to fully capitalise on an improving office market and the ability to reposition the asset for future growth has been enhanced through the extensive refurbishment program.
“We are constantly aware of the buy mandates and of those who the legitimate purchasers are.”
Mr Mitsikas said the sale was indicative of the improvement in Perth’s office market during the past year, with groups such as Redhill Partners pursuing assets trading at a large discount to replacement value.
“An increasing number of deals are being procured off-market, hence a clear understanding and knowledge of active buyers and more importantly where the quality opportunities exist is essential” he said.
The upgrade of the Murray Street building, which was constructed in the late 1980s, included new carpets, neutral walls, as well as new lifts and mechanical services, toilets and airconditioning.
Mr Mitsikas said Redhill saw the building as a prime opportunity to get into a market that was is improving, while buying off-market was about being aware of where opportunities existed.
“Axia was aware that the seller, Centuria Property Funds, had a number of assets that they were looking to keep but also sell,” he said.
“We knew Redhill Partners were keen for new opportunities in Perth after they’d just acquired 45 St Georges Terrace, so we thought this one might be a good fit for them.
“We were aware that they wanted the building, so it was just a case of approaching Centuria to see if they were willing to sell.”
