Charter Hall has announced that it will partner with its Core Plus Office Fund to acquire Bankwest Place, including the Raine Square shopping centre, valued at $458 million.
Bankwest Place is Perth’s newest CBD office building and was purchased from receivers Korda Mentha on behalf of Westgem Investments Pty Ltd.
The complex represents over 61,000 sqm of Net Lettable Area comprised of 45,000 sqm of prime office space.
Bankwest Place is 100% leased to Bankwest for an initial term of 12 years which benefits from annual 4% rental increases and four yearly market reviews capped at 10%.
Set on a 1.2 hectare site, the building also features a three level, 9,831 sqm retail centre anchored by a 12 year lease to Coles Supermarkets.
“With annual 4% reviews and a 10% capped market review in three years, we are expecting a compound growth rate of 5% per annum for the office renal income, which represents over 70% of the market rental income profile of the whole complex,” said Mr Harrison.
The building also comprises two hotel complexes, totaling 5,736 square metres, which are leased for eight years and pose potential for future expansion.
Joint Managing Director for Charter Hall, David Harrison, said the acquisition represents Charter Hall’s commitment to raising and deploying capital into core real estate investment.
“Despite the slowdown in the resource sector, we are confident about the longer term outlook for Perth and are attracted to the security of a non-resource tenant of Bankwest’s calibre in this active precinct.
“We also believe we can add value to the non office components of the complex, utilising our retail experience to extract greater value for our investors,” said Mr Harrison.
The purchase is expected to be earnings accretive in FY14.