Just a year ago, property owners with commercial office stock in Perth were basking in a sellers’ market, as investors clambered to take advantage of strong capital growth and rising rents.
Just a year ago, property owners with commercial office stock in Perth were basking in a sellers' market, as investors clambered to take advantage of strong capital growth and rising rents.
Fast forward to nearly halfway through this calendar year and there's yet to be a single official sale of a prime or A-grade office building in the CBD.
Despite a number of marketing campaigns having closed, the only deal believed to have made it over the line is Singapore Airlines House, at 178 St Georges Terrace.
Among those to have failed to sell are 251 Adelaide Terrace and Wesfarmers House, although several written offers were fielded for the latter.
Both sites attracted interest after their official campaigns finished, and 251 Adelaide Terrace is now under contract.
Hawaiian's 11-storey building at 182 St Georges Terrace, formerly Jardine House, was withdrawn from the market after it failed to sell for an asking price of $36.5 million.
It was the first time, in at least 12 months, that a price tag had been openly attached to a CBD office building.
Next door, 178 St Georges Terrace is understood to have sold to a Singaporean investor for a much lower price than was expected.
While several transactions have failed to eventuate, new stock is continuing to be put on the market, such as Allco Commercial Real Estate Investment Trust's half share in Central Park.
Down the terrace, a half share is also up for sale at BankWest Tower, which has attracted an offer from Saracen Properties.
Managing director Luke Saraceni said it was a strategic decision, given BankWest was the major tenant in Saracen's joint venture, Raine Square, which is believed to be behind schedule.
National player GE Real Estate Investments Australia Pty Ltd, a subsidiary of multinational General Electric, has also tried to offload part of its portfolio in Perth.
However, the group's Allendale Square property has been passed in, despite several written offers being put forward.
GE bought the 32-storey building at the height of the market in December 2006, for $154 million.
But according to Savills divisional director of investment sales, Miles Rowe, the strength in office rents has provided an upside.
"There are so many rent reviews coming through on that asset within the next 12 to 18 months, which will generate quite a significant income," Mr Rowe said.
However, GE looks set to have a win elsewhere, with nearby property, 30 The Esplanade, currently under offer.
The company is also understood to have put its Beldon Green shopping centre development on hold indefinitely, which was to be one of the first projects in WA to target a six-star green-star rating.
CB Richard Ellis institutional investment properties manager Andrew Woodley-Page said deals were taking much longer to close than the usual five-week period.
"There's probably still a slight gap between what the vendor expects and what can be asked for in the market," Mr Woodley-Page said.
"However, it's also not as straightforward because of the changed financial market situation. It's taking a lot more work for vendors, agents and financiers to get the deals done."
Mr Woodley-Page said private investors effectively had the market to themselves, given the difficulty faced by many listed players in sourcing funds, but that they were being cautious.
He said even those property trusts with cash reserves weren't spending.
"There's genuine interest in doing a deal, but no sense of urgency," Mr Woodley-Page said. "There's a lot of stock on the market, and with cash rates where they are, there's nothing wrong with having cash in the bank."
Meanwhile, developer Saville is in discussions with four ASX-listed investors over its Capital Square project - a joint venture with Babcock & Brown.
Saville sales and marketing director Peter Gianoli said the company was open to either a part-share or full-sale of the project, which he said could go for $100 million.
- See property, page 28