Warrington spends $18.25m on St Georges Terrace asset

Warrington Property has made its second major Perth acquisition of 2019, paying $18.25 million for the office building at 179 St Georges Terrace.

The sale, which was brokered by commercial agency Colliers International, was undertaken through Warrington’s Perth-focused office and industrial fund, WPVAT II.

Warrington intends to refurbish and reposition the asset, investing around $7 million, to bring it in line with A-grade office properties across the city.

The acquisition is the fifth property within the WPVAT II fund, following the acquisition of two office buildings and two industrial assets in 2018.

It also follows Warrington’s acquisition of 675 Murray Street in West Perth, for which it paid $4.25 million last month.

Managing director David Zimmerman said Warrington had a significant portion of the fund’s $150 million targeted raise to invest in the Perth market.

“We believe in Perth over the long-term and acknowledge that the cycle can be very difficult here,” he said.

“We remain focused on identifying and investing in further opportunities in Perth and the management team continues to have significant and increasing co-investment alongside our external investors to ensure our interests are aligned.”

Colliers International head of investment services Wayne Lawrence said interest in Perth office assets was beginning to extend to buildings with value-add potential.

“Demand is still strong for leased office assets, but with confidence gradually returning to the leasing market, there is also an appetite to purchase buildings with high vacancies and good leasing prospects,” he said.

The building last changed hands in 2003, when it was acquired by GE Capital St Kilda for $11.1 million, according to RP Data.

Colliers International investment services associate director Tory Packer said the 4,164 square metre, eight-storey building was in a prime location that would maximise its appeal to tenants.

“We expect ongoing yield compression and rental growth to be the drivers for office capital growth in Perth in the next few years,” Ms Packer said.