Brookfield’s 108 St Georges Terrace has come to market and is set to generate significant local and offshore interest, with offers for the Perth CBD landmark tower anticipated to be more than $350 million.
JLL’s Simon Storry, John Williams and Luke Billiau together with CBRE’s Aaron Desange, Michael Andrews, Flint Davidson and Nicholas Volk have been appointed to sell 108 St Georges Terrace on behalf of Brookfield via an international Expressions-of-Interest campaign.
Standing at 51-levels, 108 St Georges Terrace offers 38,332 sqm of high-quality A-Grade office accommodation, providing expansive views over the Swan River, Kings Park and the wider Perth metropolitan area.
The office tower is complemented by the three-storey, 1897-built and heritage-listed Palace Hotel, a fully refurbished character-style building that offers unique character offices, conferencing facilities available for tenants use, and ground floor hospitality operated by Meat and Wine Co.
Featuring extensive and modern end-of-trip facilities, and 103 basement car bays, the asset is situated on a sizeable 3,891 sqm corner landholding on the city’s busiest intersection of St Georges Terrace and William Street.
JLL’s Executive Director Capital Markets – Australia, Simon Storry, said, “108 St Georges Terrace has only traded once in 30 years as a 100% interest, offering investors a compelling opportunity for control over a prime grade asset in the heart of the Perth CBD, which has benefitted from significant building refurbishment and capital expenditure works over the last 10 years.
“Few buildings of this quality have traded in the Perth CBD in recent years, highlighting the scarcity of investment opportunities in this category amid an ongoing flight to quality.
“International investors are actively seeking strategic assets across Australia’s CBDs, particularly high-quality office product in key locations. With the re-opening of international borders, we are seeing new capital sources emerge, and the removal of domestic travel restrictions has been hugely positive for the Perth office investment market.”
CBRE’s Head of Capital Markets – WA, Aaron Desange, said, “An iconic fixture on Perth’s skyline, 108 St Georges Terrace represents prime core CBD real estate with an opportunity to produce core plus returns. The building will be regarded by international investors as a trophy asset and will undoubtedly attract capital being deployed in Asia Pacific.
“Providing a weighted average lease expiry (WALE) of 3.6 years, no single occupant represents more than 25% of the property’s income stream allowing for the retention and expansion of existing tenants within the building. This aligns well with the likelihood of constrained office supply from 2025 to 2027 helping support future rental growth prospects.”
With occupancy of 87.3%, the asset is currently outperforming both the headline vacancy rate of 19.7% across the Perth CBD, and the A-Grade vacancy rate of 18.8% for Q1 22, according to JLL Research. The leasing success has been driven by a deliberate strategy to attract and retain tenants, maximising quality, adaptability, uniqueness, and sustainability coupled with attractive modern fit outs and building amenity.
Key tenants of 108 St Georges Terrace include global mining and metals company South32, ASX-listed financial services firm Pioneer Credit, Asia’s third largest office space provider The Executive Centre, and global law firm Norton Rose Fullbright.
International Expressions-Of-Interest for 108 St Georges Terrace, Perth close on Wednesday 29 June 2022 at 2pm (AWST).