Macquarie meets the market for office sales

Two major Perth CBD commercial sales in recent weeks have given early indications of where values could be headed, after months without a major commercial office sale.

Last week, Macquarie Office trust sold 45 Francis Street Northbridge, which houses the Australian Tax Office, for $95 million to German banking group Dekabank.

The property was sold at a $3 million, or 3 per cent, discount to the December book value and will deliver a $31.6 million profit to Macquarie.

Macquarie also sold its 81 St Georges Terrace 14-storey office building to former Australian Fast Foods owner Nick Tana for $39 million late last month.

The off-market deal was a bargain buy for Mr Tana, who picked up the property for almost $3 million less than what Macquarie bought it for from former owner GE Real Estate for in mid-2007.

"If you are selling in the market at the moment you have got to be motivated. Macquarie has its own reasons choosing to sell and it was prepared to meet the market," Australian Property Institute president Ross Hughes said.

"The yield on ATO was close to 10 per cent and that is up from about 8 per cent two years ago. If you are selling you will have to expect to sell at higher yields and therefore lower value.

"The theme coming through these two deals is that they are government tenants locked in until 2016 and 2017, therefore you are buying security and you are probably going to bridge the challenging times that will apply for the next few years."

Also this week, listed property trust Commonwealth Property Office Fund reduced the book value of 53 Ord Street in West Perth by 20 per cent following an independent valuation.