Dorado Property has paid $24.25 million for a modern office at the northern tip of the Perth CBD.
The four-storey 4637 square metre commercial building at 12 Newcastle Street, on the north west corner of Lord Street, sits above the westbound entrance to the Graham Farmer Freeway Tunnel, between Royal Perth Hospital and Claisebrook train station.
Built 10 years ago, it is 58 per cent tenanted to London Stock Exchange listed and Fortune 500 global food services company, Compass Group, which is on a 10 rental agreement.
The weighted average lease expiry (WALE) is 5.7 years.
Building boom underway in Perth’s northern fringe
Some $500 million worth of development is underway in that pocket of the Perth city fringe, including the NEXTDC data centre, next door.
Ms Foley described the investment as “one of Perth’s most recognisable city fringe office assets, with a striking design and exceptional exposure”.
“The building offers a secure income stream, with the ability to generate further income from the vacancy and adding value through the potential of rooftop signage.”
Ms Foley added that Perth’s city fringe market currently offered lower rents for tenants, by around 35% compared to equivalent buildings in the CBD core “making it an attractive proposition for tenants seeking affordability while still benefitting from a central location”.
Mr Giles said the office is well placed to benefit from the recovery in Perth’s office market.
“We believe the asset will benefit from outsized rental growth as the CBD continues to expand northwards, and the difference in rental values between the CBD and fringe areas decreases over time.”
Founded in 2009, Dorado Property said “its investment strategies include the provision of first mortgage and mezzanine debt, development capital and the direct acquisition of real estate assets across asset classes and locations”.
It has made more than 160 transactions to date, in both Perth and Sydney, and worth a total of more than $500 million.