Singapore’s ARA Asset Management Puts Perth Office Tower For Sale
AUSTRALIA – Singapore-based property fund management company ARA Asset Management has put up for sale the 81 Street Georges Terrace office building in Perth, Australia at an asking price of more than A$90 million, according to a recent report from the Australian Property Journal.
This comes as activity in Perth’s CBD office market rebounds after the reopening of the country’s borders in March 2022.
81 St Georges Terrace has a land area of 1,387 sq m and a net leasable area (NLA) of 12,233 sq m. These consist of ground-floor retail premises spanning 838 sqm and 11 floors of office space. The commercial property was renovated in 2016 and 2017, in addition to having a 5-star NABERS Energy certification.
At present, the office tower has an occupancy rate of 98.7 percent. It is occupied by Snap Fitness and leased mainly to Western Australia’s Ministry of Works (Health Corporate Network). The commercial property generates an overall rental income of A$7.6 million per annum and has a weighted average lease expiry (WALE) of 3.9 years.
ARA Asset Management has appointed Cushman & Wakefield’s (C&W) Josh Cullen, Mark Hansen, Nick Rathgeber, and Leigh Melbourne to market the office building.
“The security of income to the government of Western Australia, combined with the core CBD location will be attractive to local and offshore investors looking for an Australian safe-haven investment,” said Cullen, who added that investors “like some Perth exposure in their portfolios to complement east coast assets”.
Digby Sutherland, the Joint Managing Director in Western Australia of C&W, revealed that office leasing demand in the Australian state was at its highest level in 10 years.
Based on data from the Property Council, the office vacancy level in Western Australia’s Capital, Perth, currently stands at 15 percent, the lowest since July 2015.
In addition, statistics from Jones Lang LaSalle (JLL) showed that Perth’s CBD saw a positive net absorption of 9,300 sq m in Q1 2022. While this is the strongest quarterly net absorption since Q4 2018, the office vacancy rate remains elevated at 19.7 percent.
“Perth is the resources capital of Australia, and the increased leasing demand is directly related to the current strength of the mining, oil, and gas industries and the flow down effect for downstream businesses,” added Sutherland.
The expressions of interest (EOI) exercise for 81 Street Georges Terrace will close on 8 June.