Primewest settles on $33.1 million West Perth office

Primewest has settled on the $33.1 million purchase of a six storey West Perth office (pictured top and below).

Vendor Warrington Capital acquired 66 Kings Park Road in 2017 for $16.1 million – a huge discount on the $46.5 million paid in late 2007 by the previous owner, Tina Bazzo, wife of local developer Alan Caratti.

Developed in 1989, the 4900 square metre office was for years occupied by IT giant Oracle which also had naming rights.

Warrington spent about $6.5 million on a major renovation.

It also found tenants for all of the area (when it acquired the asset, 80 per cent vacant).

On a 3168 sqm block adjacent to Perth’s Kings Park and Botanic Garden, 66 Kings Park Road now returns $2.185 million in annual rent.

It’s weighted average lease expiry however, is just four years.

Based on the purchase price, the deal is being struck on a 6.6 per cent passing yield.

Knight Frank represented Warrington Capital – broker Todd Schafer’s sale first reported by The West Australian last month.

Primewest plans returns

Primewest controls a portfolio of Australian assets worth more than $4 billion.

It intends to use the West Perth asset to seed a new fund – Primewest Diversified Income Trust No 4 – which was fully subscribed within a few days of being unveiled.

PDIT4 expects a 6.5 per cent return for investors in year one.

The forecast 10 year internal rate of return is 9 per cent.

The average return on equity for the same period is estimated to be 7 per cent, Primewest said.

Half a basketball court, at the back of the West Perth office.
Warrington Capital recently spent $6.5 million on a renovation and found tenants to occupy all of the office which was 80 per cent vacant three years ago.
The office is adjacent to Perth’s Kings Park and Botanic Garden.
The West Perth office’s end-of-trip facilities.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco