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Perth CBD office sales tipped to touch $1b

Perth CBD office sale transactions could reach the magic $1billion mark this year, according to Knight Frank research.

If that were to occur, it would be the strongest showing for Perth’s centre since 2013.

Knight Frank research analyst Nick Locke said six big CBD transactions this year totalled $350 million but several other likely final-quarter transactions made getting to $1 billion a possibility.

Knight Frank’s Todd Schaffer said first-half transactions were a combination of secondary buildings with high vacancy and modern buildings with strong tenant covenants. Highly coveted transactions were 836 Wellington Street, West Perth, and WorkZone West, 202 Pier Street.

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Warrington and Goldman Sachs move to sell William Square in Northbridge, a fully refurbished building with government tenants, added to Knight Frank’s conviction the year would end strongly, he said.

Despite average prime net face rents remaining relatively unchanged at $590/sqm, incentives were falling and prime net effective rents rose 3.4 per cent in the year to June 30.

Knight Frank’s Ian Edwards said less space alleviated some of the pressure on landlords to offer bargains and would flow on to face rents.

“We believe further effective rental growth will be achieved over 2018 and 2019,” he said.

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