Primewest confirms CBD office buy

Primewest has announced it has formed a joint venture with a fund advised by BlackRock Real Assets to purchase 140 St Georges Terrace. 

The 28-level tower is held within the $5 billion AMP Capital Diversified Property Fund and was developed by AMP in 1975. 

The property is located on a corner site in the CBD, which AMP has owned for more than 100 years.  

Primewest confirmed today it had established a relationship with international investment management company BlackRock to purchase the property, after reports emerged that Primewest had been doing its due diligence on the office building earlier this month. 

It's the first deal announced since Primewest’s proposed $600 million merger with Australian property group Centuria Capital. 

“It [140 St Georges Terrace] is a high-quality, 30,000 square metre A-grade office building at the epicentre of Perth’s CBD on the corner of St Georges Terrace and William Street,” Primewest executive chair John Bond said. 

“A significant amount has been spent on capital upgrades in recent years and we see further value creation opportunities for the asset given our on the ground team, pro-active management approach and in-depth Perth market knowledge.

“This will be further enhanced by BlackRock’s significant global reach, experience and vision.”

The property is more than 90 per cent occupied, with a weighted average lease expiry of about 2.8 years and is believed to have received more than 10 offers. 

While the sales price was undisclosed, it’s been previously speculated to fetch about $260 million. 

The acquisition cements Primewest’s position as the largest commercial property owner in Western Australia, according to the Business News Data and Insights list, ranked on total square metres.  

Adding 140 St Georges Terrace to its portfolio will push Primewest’s total office footprint over the 200,000sqm mark, further enhanced by Primewest’s plans to deliver a 4,500sqm office in Bunbury by mid-2022.  

Mr Bond said the joint venture planned to further enhance the asset as Perth’s premier A-grade office with a new strategic management and leasing campaign, with Primewest to provide project services, property management and leasing services. 

The sale is another boost of confidence in the Perth office market, despite it having the worst office vacancy of all major capital cities in Australia. 

The deal follows GIC’s move to purchase a 25 per cent stake in One The Esplanade from Brookfield Properties. 

One The Esplanade is currently under construction at Elizabeth Quay and will become Chevron’s new headquarters. 

Other 2021 CBD office deals includes the sale of 14-16 Victoria Avenue, near the Perth Mint, to Singapore-based Firmus Capital. 

That $18.19 million transaction was brokered by Knight Frank Australia. 

Earlier this year, Redhill Partners settled its $67.8 million purchase of 899-927 Hay Street, which comprised a 14-level office, previously known as Dynons Plaza.