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Australia’s resources capital sees home of WA Government hit the market

Jessica Freeman • 04/05/2022

81StGeorgesTerracePerthlandscape

PERTH – The mining, gas and oil industries of the West Coast are roaring ahead, as state borders re-open and investors flock to the resources capital of Australia, in a bid to secure a safe haven asset with strong lease covenants.

Market sources believe demand for quality commercial office space remains scarce as the Perth CBD sees its highest level of leasing demand in Q1 2022 in over 10 years. In light of this, an opportunity to acquire a CBD office asset securely leased to the Western Australia Government is set to hit the market, with price expectations above $90 million.

Refurbished by ARA Asset Management in 2016 and 2017 with significant capital works to services and finishes, 81 St Georges Terrace is centrally located within Perth's CBD, in the centre of St Georges Terrace, and within walking distance of key transport, retail and Elizabeth Quay.

The asset is 98.7 per cent occupied by Minister of Works (Health Corporate Network) and Snap Fitness providing a 3.9year WALE (by area) and a Fully Leased Income of $7.6m p.a. The building comprises 12,233sqm of Net Lettable Area, across 11 levels of office accommodation and 838sqm of ground floor retail, situated on a 1,397sqm site.

Boasting excellent environmental credentials with a 5-star NABERS Energy rating, the asset is for sale through Josh Cullen, Mark Hansen, Nick Rathgeber and Leigh Melbourne of Cushman & Wakefield.

Cushman & Wakefield’s Head of Capital Markets, Josh Cullen said Perth continues to be a very attractive market for both core and non-core office investors due to the enduring tenant demand from the mining sector and economy in general.

“Investors like some Perth exposure in their portfolios to complement East Coast assets and favour centrally located St Georges Terrace assets such as 81 St Georges Terrace.

“The security of income to the Government of WA, combined with the core CBD location will be attractive to local and offshore investors looking for an Australian safe haven investment” he said.

Cushman & Wakefield’s WA Joint Managing Director, Digby Sutherland said office leasing demand in Q1 2022 has been outstanding and was at the highest level for 10 years.

“Perth is the resources capital of Australia, and the increased leasing demand is directly related to the current strength of the mining, oil and gas industries and the flow down effect for downstream businesses.

“Now that our state borders are open, and investors can visit Perth to inspect properties we expect significant interest in 81 St Georges Terrace” he said.

81 St Georges Terrace is for sale via International Expressions of Interest closing Wednesday 8th June.

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