Charter Hall Sells Perth’s Hatch Building to Centuria

30 August 2017

Charter Hall has sold a fully leased A Grade office building in Perth to Centuria Metropolitan REIT on a passing initial yield of 8.6 percent and a core cap rate of 7 percent.

Predominantly leased to the Western Australian Government, the Hatch Building at 144 Stirling Street is located in the fringe office precinct approximately 1km north of the commercial CBD core and provides both the security of high quality tenants and future development potential.

The building comprises 11,042sq m of net lettable area on a prominent 5,062sq m corner location and includes a ground level foyer, ground level office, and three levels of office accommodation above. Positioned at the rear of the property is a unique 1,563sq m warehouse, which is accessible via Pier Street. The property was substantially redeveloped in 2001 and refurbished in 2011 and offers 242 parking bays.

The tenancy profile includes a mix of government and corporate tenants and the Weighted Average Lease Expiry (WALE) is 3.71 years (by income).

The sale was negotiated by Graham Postma, Paul Craig, Ben Azar and Barney Dear of Savills Australia Capital Transactions and John Williams, Nigel Freshwater and Simon Storry of JLL who said there was a lot of interest from both local and offshore investors, including a number of competing REITS.

According to Graham Postma of Savills, “The area immediately surrounding has benefitted from a recent surge of development, including several high quality commercial and residential developments such as Workzone, 130 Stirling Street, Oracle Apartments as well as new cultural developments such as the Western Australian Museum and improvements in the nearby Northbridge entertainment precinct.”

According to John Williams of JLL, “The process confirmed the depth of interest in Perth office investments. Perth is now seen as exceptional value compared to other Australian capital cities. The active buyers also recognise that the Perth office rental market has reset and is likely to deliver income growth in the medium term. Consequently, we are seeing increasing levels of interest from eastern states based funds while offshore investors still remain active.”

The site is currently under developed, providing opportunity for further commercial development or for a residential tower build on the site. The City of Perth Planning Scheme No 2 applies a base plot ratio of 15,171sq m on the site. This scheme also applies the potential for bonus plot ratio which if maximised, provides the potential for up to 22,756sq m of NLA on the site.

 
 

Key Contacts

Graham Postma

Graham Postma

Managing Director - WA

Savills Perth

+61 (0) 8 9488 4153

 

Paul Craig

Paul Craig

CEO Australia & New Zealand

Savills Australia

+61 (0) 2 8215 8888