Quintessential Equity is looking to divest its only Perth asset, in a deal that could test the city’s office market.
The Victorian property fund has listed 8 St Georges Terrace, via JLL and CBRE, with hopes to receive about $25 million.
The eight-storey building is fully leased to multiple tenants including LHD Lawyers and Siemens, with 4,297 square metres of net lettable area and a 3.7-year weighted average lease expiry.
Quintessential, which owns several office buildings in Queensland, NSW, South Australia and Victoria, purchased the building for $10.19 million in 2019.
The company spent $8.8 million on recent upgrades to the property, including a new lobby, end-of-trip facilities and a conference room.
If it transacts, it will be one of the first fully-leased and refurbished office buildings in central Perth to sell in years.
CBRE head of capital markets WA Aaron Desange said the scale of the refurbishment provided significant underlying value.
“Given today’s construction cost environment, replicating this work today would probably cost more like $13 to $14 million, so the heavy lifting that’s been done here significantly underpins an incoming purchaser’s cash-on-cash returns,” he said.
CBRE associate director Nicholas Volk added that St Georges Terrace assets of below $30 million were rare, with only five selling in the past 15 years.
JLL senior director of capital markets Sean Flynn said the buildings presented a compelling opportunity for investors to capitalise on some very strong underlying market fundamentals in Perth.
“The CBD office market is outperforming relative to eastern seaboard markets, supported by positive net absorption, upward momentum in face rentals, and declining vacancy rates,” he said.
JLL senior director capital markets Nigel Freshwater said the building’s expiry profile aligned perfectly with Perth’s market, which had no new supply expected until 2030.
The property has secured eight new leases, totalling approximately 66 per cent of the building’s net lettable area, since the start of last year.
An expression of interest campaign for the property is running until September 10.
Other CBD office buildings on the market in Perth include 81 St Georges Terrace, 26 St Georges Terrace and the Alluvion Building at 58 Mounts Bay Road.
Several assets have come to market and not transacted in recent years, including 89 St Georges Terrace, 251 to 267 St Georges Terrace and 235 St Georges Terrace.
Quintessential Equity came close to purchasing one of Perth’s single largest landholdings, in St Martins Centre, in 2023.
But the company withdrew its bid during the due diligence process.
