10/06/2014 - 14:57

Demand surging for Perth offices: Colliers

10/06/2014 - 14:57


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Demand surging for Perth offices: Colliers
This McCourt Street medical facility and office building in Subiaco was one of Colliers' near-$100 million worth of commercial transactions in the March quarter.

Commercial real estate agency Colliers International is tipping strong demand to continue for Perth assets in the coming financial year, after recording nearly $100 million in transactions since March.

Colliers International director of metropolitan markets Nicholas Agapitos said the surge outstripped a similar jump in the final quarter of the 2012-13 financial year, when Colliers brokered the sale of about $70 million worth of assets.

Prominent transactions included the $6 million sale of 269 James Street in Northbridge, the $5.5 million sale of 12 St Georges Terrace, and the $3.5 million sale of 10 Alloa Road in Maddington.

Other significant transactions included various commercial units at Equus on Hay Street, which collectively sold for $6 million, as well as the $2.4 million sale of 251 Adelaide Terrace and the $1.5 million sale of 110 Cambridge Street in West Leederville.

The figures were in contrast to statistics compiled by industry analysts RP Data, which said there were just $32.2 million worth of transactions over the same period, down from $48.4 million in the three months to the end of March.

RP Data said the 12-month total was $928.8 million, a small reduction on the $937.3 million recorded in the same period last year.

However, RP Data’s figures do not include transactions yet to settle.

Standout sales recorded by RP Data included the $9.7 million sale of API House at 100-104 Murray Street, and the $4 million sale of units 13, 14 and 15 at Kandahar House, located at 41-43 Ord Street in West Perth.

Mr Agapitos said offshore investors made up a significant proportion of buyers in the Colliers-brokered sales, which also included local high net worth individuals and syndicates.

“The common thread is that they’re all looking for secure investments that offer a stable income stream,” he said.

The sales comprised around 40 strata and green title transactions across the metropolitan area, Mr Agapitos said.

Strata office units were the most sought-after assets, while other commercial assets also held appeal for buyers, he said.

“We did see the emergence of purpose-built medical and health sector-related assets as a growth area, with a number of new developments around the metropolitan area and considerable interest from both investors and owner-occupiers in those opportunities,” Mr Agapitos said.

“A great example of that is a medical centre development in Karrinyup; we’ve just sold the last units in there, with buyers ranging from ophthalmologists to paediatricians.

“We’ve also been involved in these sorts of developments in Subiaco, Craigie and Wembley Downs over the past year, and they’ve been strong performers.”

Mr Agapitos said he expected investors to wield increasing influence in the commercial property market in the 2014-15 financial year.

“We believe there will still be a major focus on investment stock given the increase of vacancy in the office sector in the CBD, which will flow out to the suburbs,” he said.

“This will create stronger demand for securely-leased investment properties, which will then result in a compression of yields.

“The overall outlook is likely to be one of strong demand and low stock levels.”


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