A$90 Million Acquisition by Singapore Group
In the first significant office market transaction in Perth, Australia for 2014, Savills has exclusively negotiated the off market sale of the 130 Stirling Street office building on the northern fringe of the Perth CBD for A$90 million.
The fully-leased A-Grade office building has been purchased by Listed Singapore Group, Hiap Hoe, in what is their first acquisition in Western Australia.
The property was held in a Charter Hall syndicate. It was constructed by Charter Hall in 2009 and subsequently leased by Savills.
The off market transaction to Hiap Hoe was negotiated by Paul Craig and Miles Rowe from Savills Perth office in conjunction with Craig Ward of Savills Singapore.
Paul Craig, Managing Director of Savills Western Australia and Managing Director of International Investment for Savills Australia, said 130 Stirling Street is a landmark sale for the Perth market. This sale is Hiap Hoe’s fourth acquisition in the Australian market following the acquisition of three separate Melbourne properties for a total of A$177 million, including a car park and office building at 380 Lonsdale Street for A$43.8 million in a deal also negotiated by Savills Australia.
“Not only is this the first major office transaction in Perth this year, it is also the first sale over A$75 million in the Perth market since May 2013. It also signals the entry of a major new international investor in Perth, which represents a strong vote of confidence in the property fundamentals and future outlook for the market,” said Mr Craig.
Mr Teo Ho Beng, Hiap Hoe’s Executive Chairman and Chief Executive Office, said “It is our strategy to selectively acquire quality, well-located land sites with excellent investment prospects that are able to generate greater returns for our shareholders. Following the success of our three earlier acquisitions in Melbourne, we are pleased to further expand Hiap Hoe’s presence into Western Australia with the inclusion of 130 Stirling Street in our real estate portfolio.”
Mr Craig added, “This building is a showcase of modern, sustainable office accommodation in one of Perth’s most dynamic developing precincts, and Savills is proud to have leased the property and now transacted its sale with a high-quality tenancy profile in place.”
Craig Ward Senior Director Savills Regional Capital markets based in Singapore said: “The fundamentals of the Australian real estate market remain enticing to Asian investors. Reducing debt costs are further enhancing the returns on equity and this comfortably combines with long term stable income and continued rental and capital growth potential”.
Designed by international architects Woods Bagot, 130 Stirling Street is a 12,349sq m 5.5 star National Australian Built Environment Rating System (NABERS) building that features the latest green building initiatives including active chilled beam technology.
Its four levels of highly efficient office accommodation are 100% leased to P&N Bank, Medicare (Commonwealth Government of Australia), Downer EDI and HLB Mann Judd with a Weight Average Lease Expiry (WALE) in excess of six years.
Miles Rowe, Divisional Director, City Sales of Savills Western Australia, noted that the quality of the lease covenants provided by 130 Stirling Street was a significant attraction for the purchaser.
“High grade tenants, providing broad base exposure to finance, federal government, professional business and mining services and a good spread of lease expiries, was a big plus for this asset,” Mr Rowe said.
The 130 Stirling Street building provides views to the Perth city centre and is only 800m to Perth’s Hay Street Mall. It also includes ground floor lobby and retail areas, four levels of parking for 239 cars, bicycle storage and locker and change room facilities.
Paul Craig further commented that assets of this outstanding quality in major capital cities of Australia are rare to find and even more difficult to unlock from vendors that are enjoying the strong returns Australian assets provide.