Seven West Media is selling its Perth headquarters to a special purpose Primewest trust following a $75 million off-market deal.
The Osborne Park facility occupied by West Australian Newspapers and TVW7 is trading with a 15 year leaseback.
Based on the vendor’s starting net annual rent ($4.3m), Primewest Media Trust is buying it on a 5.7 per cent yield.
Settlement is due in four weeks, the vendor said in an ASX statement on Wednesday.
Seven West Media’s Perth HQ
Seven West Media’s 5.65 hectare Osborne Park headquarters spreads across three titles – 50 and 54 Hasler Drive and 44 Walters Drive – about five kilometres north west of Perth’s CBD.
It includes 11,395 sqm of offices, 31,166 sqm in warehousing and 500 car parks.
Primewest Media Trust is anticipating a monthly cash distribution of 8 per cent and a 15 per cent forecast return on equity.
Primewest executive chairman John Bond said the acquisition offered “the company with an exceptional, counter-cyclical investment opportunity at below replacement cost but more importantly an opportunity to create something very special for the area in the long term”.
“It also provided strong cash flow to help fund its future development potential”.
Mr Bond refers to the Herdsman Glendalough Structure Plan, awaiting approval, which would allow the waterfront property to be replaced with a mixed-use complex comprising residential.
“We believe the Herdsman Glendalough area, together with the Stirling City Centre, will form Perth’s second CBD with a vibrant urbanism that embraces mixed-use development, dense built form, high frequency public transport and quality public spaces for the enjoyment of residents and employees,” the executive added.
“The Seven West location is the landmark, gateway site in the new precinct and will be developed over a relatively long time-frame”.
Mr Bond said Primewest would work with Seven West to identify site/business efficiencies to unlock potential medium-term office and mixed-use development opportunities.
Established in 1995, it’s assets under management, worth about $4 billion, are spread across Australia and the United States.
It markets itself as a “value add and often counter-cyclical manager”, mainly buying industrial, office and retail stock – including bulky goods – on behalf of stapled security shareholders and fund investors.