Melbourne-based fund manager SAITeysMcMahon has been confirmed as the buyer of Wesfarmers House on the Esplanade, paying $47.5 million in the second biggest property deal of the year.
Melbourne-based fund manager SAITeysMcMahon has been confirmed as the buyer of Wesfarmers House on the Esplanade, paying $47.5 million in the second biggest property deal of the year.
SAITeysMcMahon is a manager of unlisted commercial property investments in Australia with over $1.375 billion in funds under management.
The Wesfarmers House deal is overshadowed only by GESB's sale of its half share in Central Park to east coast-based buyer Allco Finance Group for $159 million, in a year when the nation's property buyers have increasinly eyed the resilience of Perth's property market against.
Below is the full announcement:
Wesfarmers House at 40 The Esplanade in Perth has sold for $47.5 million in an off-market transaction negotiated by Paul Craig and Miles Rowe from Savills WA. The sale reflects an initial yield below 7.5%.
Melbourne-based fund manager SAITeysMcMahon purchased the property from West Australian private investment company Cape Bouvard Investments (CBI) in the second largest CBD office sale in Perth in 2005.
Mr Craig, Savills WA managing director, said several institutions were keenly seeking WA CBD property.
"The level of interest has been very buoyant with the sudden shortage of space for lease as a result of strong growth in the WA economy, particular in the resource sector," Mr Craig said.
Mr Rowe, Savills WA Director for Investment Sales, indicated a convergence of key factors over the past 6-9 months had ignited interest in the Perth CBD Office market.
"Record levels of net absorption flowing from the resources boom have cleaned up a large amount of the residual vacancy," he said.
"In addition, rising costs and a two to three year construction timeframe for proposed developments have increased the economic rent for new office buildings in Perth.
"As a result we will see significant rental growth in the next 3-4 years and this is what has caught the eye of investors."
CBI General Manager Todd Morcombe said "The sale reflects the company's strategy of buying at a time when the market is undervaluing an asset, restructuring its cash flow and then selling it once the market has improved"
"CBI is not looking to exit the Perth market but will sell assets when it believes the price is right"
Mr Craig noted that "There is no doubt buildings in this market are being sold on "tomorrow's rents". The key was identifying where additional income could be extracted to put yourself ahead of the rest of the buyers," Mr Craig said.
Wesfarmers House is a quality "A Grade" building, positioned on The Esplanade, providing uninterrupted views over the new Perth Convention & Entertainment Centre and the redevelopment of the Perth Port.
The 11,076sqm building is fully leased with the major tenant, Wesfarmers, occupying 41/2 floors. The property also benefits from ample tenant bays and over 50 public carparks.
The Wesfarmers House sale follows Savills successful negotiation in 2005 of Kwinana Hub for $32million, also by Mr Rowe.
