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Strong CBD interest continues

Commercial interest in the CBD continues to be strong, according to a report by real estate company Herron Todd White.

Herron director Garrick Smith said sales were concentrated on secondary CBD and near city commercial buildings.

“Rental levels, however, are set to continue without vigour due to continued oversupply of A and B grade office space,” Mr Smith said.

“The market is looking with interest at the proposed developments for Woodside of about 50,000 square metres of space on the corner of St George’s Terrace and Milligan Street and the seven-storey plan for Cape Bouvard at 181 St George’s Terrace.”

Recent sales in the CBD include 8 St George’s Terrace, for $10.2 million, comprising an office building with 4,650 sqm on an 837 sqm site which reflected a passing yield of 9.45 per cent.

The Perth Mail Exchange located on a one hectare site sold for $3.8 million and an office in Thelma Street, West Perth, sold for $2.4 million reflecting $1,728/sqm on site area.

Mr Smith said only limited opportunities exist in the retail market but demand is strong due to continued consumer confidence and a bright outlook towards sales turnover.

The $80 million upgrade of Garden City is about to commence, increasing retail space by 16,500 sqm, and the Gateways Regional Shopping Centre in the southern suburb of Thompson Lake has recently opened providing 11,000 sqm, including two supermarkets and 38 speciality shops, with approvals in place over the next 20 years for some 50,000 sqm.

A property at 20 Bayview Terrace, in the blue chip retail precinct of Claremont, sold with vacant possession for $1.75 million.

In the industrial market, the shortage of well-located industrial lots has contributed to the success of Landcorp’s Canning Vale Business Park subdivision with prices exceeding $100/sqm.

A property at 14 Magnet Road, Canning Vale recently sold for $1.205 million reflecting $57/sqm for 2.11ha.

Another property at 182 Lord Street, East Perth, comprising a site of 1,356 sqm with showroom, office and warehouse totalling 1,180sqm sold for $760,000 reflecting a passing yield of 10.85 per cent.

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