A West Perth office building has sold for $20.28 million via a competitive expressions-of-interest campaign to national investment and development firm, RG Property.

The Robert Cann & Associates-designed five-level property at 76 Kings Park Road is 76 percent leased to a diverse range of tenants, including anchor tenant, DownUnder GeoSolutions (DUG). The sale represents a rate of $5,569 per square metre and a market yield of 7.20 percent.

Savills Australia’s Nick Charlton, Barney Dear and Chas Moore brokered the deal after receiving interest from local and interstate private investors, syndicators and funds.

“We received strong enquiry throughout the campaign and nine offers in the first round of bidding,” Mr Dear said.

He went on to say that interested parties were attracted to the asset for its prominent corner location; high building quality, due to the vendor’s recent significant capital expenditure; and ability to enhance the yield profile through implementing a leasing strategy for the vacant space.

“Having been under the same ownership for more than 18 years, the property has benefitted from this continuity and stability, and there have been significant upgrades and investment within the building fabric, including the communal areas, lifts, electric transformers and building controls,” he said.

Mr Charlton said that the property’s strong yield profile of 7.20 percent was a key selling point.

“Other tenants supplement the lease to DUG,” he said.

Mr Charlton said the location and layout also helped to seal the deal.

“76 Kings Park Road benefits from its prominent corner location on the main thoroughfares of Kings Park Road and Thomas Street,” he said.

“This visibility, coupled with its excellent car-parking provisions for 107 vehicles, means that the asset is attractive to its current occupiers, as well as potential tenants. In addition, the layout of the floors is conducive to be occupied in part or as a whole.”

Mr Dear said that the deal highlighted burgeoning buyer appetite for well-located assets in the West Perth precinct.

“Investors continue to look for high-quality office assets in Perth’s city-fringe markets,” he said.

“We have received consistent enquiries into the tightly held West Perth office market in recent months, with vacancy rates dropping 100 basis points between June and December, to end the year at 14.8 percent.

“The recentralisation of tenants from suburban locations and recent stock withdrawals in West Perth will continue to drive this trend.”

Mr Charlton said the uptick in leasing demand was flowing through to transactional activity, as local and offshore buyers increasingly adopted a positive view on the precinct.

“Between 76 Kings Park Road, 1 Havelock Street, and the recent sale of 146 Colin Street, $70 million of property was transacted in West Perth in the past six months,” he said.

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