03/07/2018 - 12:54

GDI lifts valuation on Perth office tower

03/07/2018 - 12:54

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Nine months after GDI Property Group settled its acquisition of A-grade commercial tower Westralia Square the building’s valuation has increased by $38.75 million, an encouraging sign for the Perth office market.

GDI lifts valuation on Perth office tower
GDI purchased the building at 141 St Georges Terrace for $216.25 million in 2017. Photo: Attila Csaszar

Nine months after GDI Property Group settled its acquisition of A-grade commercial tower Westralia Square, the building’s valuation has increased by $38.75 million, an encouraging sign for the Perth office market.  

Sydney-based GDI issued a statement on the ASX today, announcing the increase in independent valuation for Westralia Square, located at 141 St Georges Terrace, from $216.25 million in October 2017 to $255 million as at June 30 2018.

The property was previously owned by the Insurance Commission of Western Australia, which accepted an offer from GDI in August and settled the sale in October – one of the largest-value office transactions to take place in the CBD in 2017.

Westralia Square is adjacent to Brookfield Place, with 32,635 square metres of net lettable area across 18 levels and an average floor plate of 1,800sqm, sitting on top of a multi-level car park comprising 537 bays for tenant and public parking.

The property is approximately 93.5 per cent occupied, largely by state government departments with lease expiries in the first half of 2020.

GDI said the valuation increase was largely the result of improvements in both the Perth rental and capital markets and forecast rental uplift following upgrade works to the lift, end-of-trip facilities, lobby the refurbishment of the vacant level seven, for an undisclosed sum.

This it said had resulted in a significant increase from the previous independent valuation in the assumed net market rents on expiry of the existing leases and a tightening in the capitalisation rate from 7.25 per cent to 7 per cent.

Business News reached out to GDI, which declined to comment and provide details of who undertook the independent valuation.

GDI’s Western Australian portfolio includes three other CBD office assets – 197 St Georges Terrace, 5 Mill Street, and 1 Mill Street – as well as 6 Sunray Drive Innaloo, home to IKEA, the acquisition of which it settled earlier this year.

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