Centuria has teamed with MA Financial to acquire a Perth CBD office listed 13 months ago.
The buyers will each hold a 50 per cent stake in Allendale Square, at 77 St Georges Terrace, in single asset funds now seeking wholesale investors.
The deal, with Mirvac, is worth c$223 million, speculated to reflect a passing yield of just over six per cent.
The vendor valued the asset at $207m in June, assuming a 6.75pc capitalisation rate.
When it hit the market, price expectations were c$250m.
Following the 77 St Georges Tce sale it still holds, in Perth, the 32 level David Malcolm Justice Centre.
At 28 Barrack Street – about 400m form Allendale Square – that property was valued at $248.3m three months ago.
For Centuria and MA, Allendale Square is the second recent office co-investment, coming off the $166.7m deal with Blackstone for Adelaide’s 25 Grenfell St, last October.
Mirvac paid $231m for Allendale Square in 2013, for the Mirvac Property Trust.
The manager also undertook a $62m renovation six years ago.
With c25,772 sqm of A-grade office area over 2745 sqm of retail – a precinct dubbed Underground at Allendale Square – 77 St Georges Tce rises 31 floors, offering Swan River views.
There are 84 car parks too.
The site spreads 4057 sqm – just over an acre (story continues below).
A sale earlier this year to Fortius, which was last week taken over by Growthpoint, was scuppered.
Negative into a positive
Allendale Square was listed 22pc vacant, but sold 85pc occupied.
The Weighted Average Lease Expiry was 6.2 years; it is now 5.8 yrs.
MinterEllison and WA Bar Chambers are the anchors – all up occupying c9476 sqm.
Colliers’ Adam Woodward with Cushman & Wakefield’s Josh Cullen were the agents.
According to the Property Council of Australia’s bi-annual Office Market Report, released in August, Perth CBD office vacancy is 15.8pc, up nearly a basis point since January, and the highest in the country.
Sublet vacancy however, is at its lowest, the buyers said.
Centuria, which controls its leasing and management in-house, said its Perth office portfolio has a relatively low 5.02pc vacancy rate and it plans to reposition 77 St George Tce, starting with a major renovation.
Joint chief executive officer Jason Huljich described the property, with its vacancy and staggered WALE, as a counter cyclical opportunity.
The manager is now seeking an initial $70m from wholesale investors for its fund.
MA meanwhile is calling out for a total of $70m to back its trust.
Each entity is scheduled to run five years.
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