Private equity real estate investment group Dorado has purchased a four-level office building on the northern fringe of Perth’s CBD for $24.25 million.
Constructed in 2010, 12 Newcastle Street, Perth, has a net lettable area of 4,637sqm and a WALE of 5.7 years.
London Stock Exchange-listed and Fortune 500 company Compass Group (LSE: CPG) is the anchor tenant, occupying 58% of the complex on a long-term lease.
The iconic building is located on the corner of Newcastle and Lord Streets above the westbound entrance to the Graham Farmer Freeway tunnel.
The rapidly-evolving part of Perth’s city fringe has attracted approximately $500 million in development in the past 24 months, including the neighbouring NEXTDC data centre.
CBRE’s Kate Foley and Ben Younger managed an off-market sale for the vendor.
“12 Newcastle Street is one of Perth’s most recognisable city fringe office assets, with a striking design and exceptional exposure, positioned above the Graham Farmer Freeway,” Ms Foley said.
“The building offers a secure income stream, with the ability to generate further income from the vacancy and adding value through the potential of rooftop signage.”
Ms Foley noted that Perth’s city fringe currently offered lower rents for tenants, by around 35% against equivalent buildings in the core of the CBD, making it an attractive proposition for tenants seeking affordability while still benefitting from a central location.
“Dorado was also attracted to the building’s excellent income security, led by global food service leader Compass Group’s 10-year lease,” Ms Foley added.
David Giles and James Khng led the acquisition for Dorado.
“Dorado is excited to acquire 12 Newcastle Street, a prominent office asset with strong investment fundamentals, well placed to benefit from the recovery in Perth’s office market,” Mr Giles said.
“We believe the asset will benefit from outsized rental growth as the CBD continues to expand northwards, and the difference in rental values between the CBD and fringe areas decreases over time.”
Dorado was founded in 2009 and its investment strategies include the provision of first mortgage and mezzanine debt, development capital and the direct acquisition of real estate assets across asset classes and locations.
The group has deployed more than half a billion of capital in more than 160 transactions to date and has offices in both Perth and Sydney.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
