The Centrelink building in Perth’s inner southeastern suburb of Victoria Park has been sold for the first time since the property was built more than 30 years ago.
It was purchased by two local investors from six local country families, who originally built the office building for Centrelink.
The property was sold for $8.75 million to show a 6.66 per cent net return in a deal negotiated by Tony Delich of Knight Frank.
The single-story office building at 117 Shepperton Road has 2,352sq m of net lettable area with 84 undercover car parks and 14 visitor car parks on a 4,082sq m site.
It is prominently situated on Shepperton Road, directly behind the Woolworths-anchored Victoria Park Central Shopping Centre, the Albany Highway retail precinct and the Town of Victoria Park’s council office.
Mr Delich said the property appealed to owner occupiers, investor and developers, who all expressed interest during the campaign.
“The buyers saw the potential of very good holding income with a view to develop the large site located at the highest point in Victoria Park,’ he said.
“The local council, the Town of Victoria Park, is currently reviewing their planning scheme which will allow higher-density mixed-use development in the town centre which includes this site.
“The State Government also recently announced they are streamlining development approvals to encourage residential infill development.
“In the meantime the buyer can take advantage of a quality covenant providing solid income.
“Given the prominent location and occupancy history we believe Centrelink will remain as a tenant for the short term at least for the next four years but likely longer given location and history of occupancy.
“At the time the development market should have stabilised in terms of supply and material constraints and labour shortages, making a development on the site significantly more feasible.”
Centrelink has exercised its option of two years to extend its current lease at 117 Shepperton Road, and has a further two-year option.
Mr Delich said the 117 Shepperton Road offered a rare opportunity to acquire a large freehold property in Victoria Park, less than four kilometres from the Perth CBD.
“The building is close to plenty of transport and amenity, being in a vibrant retail and commercial precinct,” he said.