20/02/2008 - 22:00

Office rent rise suits owners

20/02/2008 - 22:00

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As office rents in Perth continue to climb, property owners are more likely to retain their assets to capitalise on growth, although the full effects of recent stock market volatility and rising interest rates are yet to be realised, according to property

Office rent rise suits owners

As office rents in Perth continue to climb, property owners are more likely to retain their assets to capitalise on growth, although the full effects of recent stock market volatility and rising interest rates are yet to be realised, according to property analysts.

While the Clough building at 251 St Georges Terrace attracted interest from buyers when it was placed on market towards the end of last year, owner Hossean Pourzand withdrew the property in order to take advantage of appreciating rents, according to Knight Frank agency director John Corbett.

“Rents have moved forward more than what the owner had anticipated,” he said.

“The thing is, rents (for the building) are around $500sqm, but the market rent is $700sqm.”

Mr Corbett said the WA investment market seemed to be unaffected by recent economic uncertainty.

“Is there going to be a flow-on effect from the stock market volatility and interest rates? There probably should be, but we seem to be immune from it because our economy is still strong,” he said.

CB Richard Ellis research manager Andrew Woodley-Page said the investment market was expected to remain strong.

 “We anticipate there will be a lot of strong campaigns this year. There’s obviously uncertainty, but it’s uncertainty around the sentiment of the institutions. They’re adopting a wait-and-see attitude,” he said.

Mr Woodley-Page, whose agency is managing the sale of 251 Adelaide Terrace, said there had been very strong interest in the site.

“We’re seeing a lot of private investor demand, because there’s less competition from the listed trusts,” he said.

Savills divisional director of investment sales Miles Rowe said it was difficult to assess the state of the commercial market at present.

“In terms of the sales evidence, it’s too early to say one way or the other,” he said.

“Until such a time as we see some results, we won’t know what the impact has been.”

However, Mr Rowe said activity remained strong in the local investor market.

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