Sydney-based property company GDI Group Ltd has paid $22 million for 12 St Georges Terrace, a 12,000 square metre office block which is home to the Chamber for Minerals and Energy.
Sydney-based property company GDI Group Ltd has paid $22 million for 12 St Georges Terrace, a 12,000 square metre office block which is home to the Chamber for Minerals and Energy.
GDI plans to strata title the 12-storey building and offer titles from $127,000 to $3.5 million each, marketed through its agent in the transaction Knight Frank.
The vendor, British Virgin Island-registered Hennex Managament Ltd whcih has strong Singaporean connections, paid $11.2 million in 1993.
Hennex upgraded the building at a cost of $2.4 million and offered it for sale in May 2004 but withdrew it from the market about a year ago.
GDI managing director Tony Veale said the Sydney office market appeared to be fully valued, with high vacancy and low yields, whereas the Perth office market fundamentals, along with Brisbane, were the best in Australia.
Located across the road from the Concert Hall, GDI plans to rename the building "The Grosvenor".
The transaction comes at a time of flourishing investment in the Perth CBD.
Another recent purchase was 251 Adelaide Terrace, which was bought by GE Commercial Finance Real Estate for $16.5 million.
Below is the full announcement:
GDI BUYS INTO PERTH TO STRATA 12 ST GEORGES TERRACE
After 12 months investigation of Australian capital markets, Sydney-based property company GDI Group Ltd has agreed to purchase an office building in Perth's CBD through Knight Frank.
GDI, an added value specialist with 27 previous projects under its belt since 1993, will strata title the building at 12 St Georges Terrace, with the strata plan due to be registered in early 2006.
The building at 12 St Georges Terrace is a 12,000 square metre office building providing office accommodation over ground and 11 upper levels.
The building is located at the eastern end of St Georges Terrace, opposite the Concert Hall and Duxton Hotel, with tenants including the State Government, the Chamber for Minerals and Energy and SMEC.
GDI managing director Tony Veale said the company had held the view for some time that the Sydney office market appeared to be fully valued, with high vacancy and low yields.
He said by contrast the Perth office market fundamentals, along with Brisbane, were the best in Australia.
"Perth has rapidly decreasing vacancy, strong demand from tenants and no cranes on the horizon, indicating a market due for a rapid increase in rents with a corresponding increase in capital values," Mr Veale said.
"Since we secured the Perth deal earlier this year A grade values in the Perth CBD have firmed significantly and recent sales are nearing $4,000 per square metre.
"We expect strata values in Perth will head to $3500-$4000 per square metre by the end of 2006."
Mr Veale said strata values in comparable properties in the CBDs of other eastern states capital cities ranged from $4500 to $8000 per square metre, making the Perth CBD look exceedingly good value.
Knight Frank agency director John Corbett, who is marketing the strata project at 12 St Georges Terrace, said stage one was now almost complete with over $8 million in strata suites sold to a combination of owner-occupiers and investors in recent months.
He said the marketing of stage two would commence in April 2006 when refurbished floors including new lobbies and bathrooms would be offered to the owner-occupier market.
Mr Corbett said the timing for the project was perfect as owner occupier space would be available in early 2006 at a time when tenants would be experiencing rapid rental increases.
He said the project would provide occupiers with the opportunity to lock in their occupation costs and purchase quality strata office space with strong capital growth prospects.
Once refurbished 12 St Georges Terrace - to be known as "The "Grosvenor" - would provide some of the best strata offices in Perth.
