Investa spends $82 million on St Georges Terrace Perth acquisition

Investa Office Fund has bought 66 St George’s Terrace, Perth, for $82.375 million. The purchase came ahead of Investa Office Fund’s (IOF) annual net profit announcement - a slump of 29% to $101.9 million on the back of a series of asset sales in the US and a dismal performance from its European property portfolio.

Its Perth acquistion - 11,447 square metre A-grade CBD office space - reflected an initial yield of 8.1% after acquisition costs.

Investa maintains the 11-storey building is currently let at a low average rent of $550 per square metre.

With a 1.8-year weighted average lease expiry, the short lease expiry profile is tipped to allow crystallising an estimated rental reversion of 15%.
Toby Phelps, the IOF fund manager, says it is an opportune time in the buying cycle.

"IOF is underweight in Perth, which is currently the strongest office market in Australia," he says.

Located on the north side of St Georges Terrace, 66 St Georges Terrace is a 1990 building between William Street and Barrack Street.

It comes with floor plates of approximately 1,000 square metres.

The property also includes two ground-floor retail tenancies totalling 180 square metres and 66 car bays.

The biggest four of its 11 tenants – comprising 74% of the building by income – are  Manpower; ASIC; Subsea 7 and Suncorp.

Its lease expiries by rental income are 54% in financial year 2013, 4% in fy 2014 and 37% in the 2015 financial year.