Worm may have turned for Perth CBD office market
by Helen Shield (thewest.com.au – 12 April, 2017)
Things are looking brighter in the CBD office market space.
Perth’s CBD office status as a counter cyclical buying opportunity is well established, with Eastern States and local buyers joining foreign buyers seeking to take advantage.
JLL WA managing director John Williams said in the past 18 months each of four office assets listed at more than $50 million had attracted more interest.
“Active investors now believe that the rent cycle in Perth has played out to the point where any downward pressure on rents is likely to be limited and a return to modest but sustainable growth is possible in the medium to long term,” Mr Williams said.
“It’s also a case of seeing value in Perth property, with a large price differential between here and east coast markets.”
JLL’s Australian Office Investment Review and Outlook reveals total office sales of $14.46 billion across the country last year. Offshore investors accounted for 42 per cent or $6.19 billion, dominated by China, Singapore and the US.
Mr Williams said the first $50 million-plus office asset for sale in 2015 attracted interest only from offshore but with subsequent campaigns local private capital and, more recently Eastern States funds, had emerged.
“The total pool of buyers has increased significantly,” he said. “Given the signs that the mining sector is regaining health and is likely to expand over the medium term, we believe the trend of increasing interest will continue.”