Alan Bond-developed tower sells to funds duo in Perth’s deal of the year

The sale of the St Georges Terrace skyscraper marks a lift in the resources capital.

Lendlease’s funds arm and property manager Realside have teamed up to buy a famed Perth tower for $339.75m in the WA capital’s biggest office sale this year.

The move signals the office market in the resources capital shows signs of improving at a time when eastern seaboard cities are seeing relatively few office deals.

The skyscraper at 108 St Georges Terrace is best known as a 1980s complex developed by WA entrepreneur Alan Bond, and the purchase partly reflects Lendlease’s efforts to play a bigger role in local deal-making.

The listed company was crunched by a downgrade last week but is trying to work more with developers and funds managers on new projects, including with entertainment tsar Justin Hemmes on a plan for towers above a metro station in Sydney’s CBD.

The Perth skyscraper was bought by Lendlease’s Real Estate Partners 4 fund and Realside from Canadian investment house Brookfield.

Lendlease Investment Management head of private equity, Paul Snushall, noted it was another acquisition for the busy fund. It has also picked up a stake in the $420m Blue Tower in Brisbane, alongside Marquette Properties, and it bought two Collins St offices in Melbourne from the Werdiger family for about $300m.

“We’re keen to enhance 108’s ground plane and end-of-trip facilities, along with creating quality fitted suites to deliver a superior product for current and future tenants,” he said.

Realside Financial Group founding partner, Mark Vonic, said there were few buildings in the Perth CBD of such quality, location and amenity. He said the purchase showed the manager’s approach to seeking out opportunities which provided clients with access to core assets with attractive returns.

Realside raised an unlisted fund to hold its stake of about 30 per cent in the tower and said it had a positive response from its investor base.

The sale was handled by CBRE’s Aaron Desange, Michael Andrews, Flint Davidson and Nicholas Volk and JLL’s Simon Storry, John Williams and Luke Billiau.

Standing at 51 levels, the complex spans 38,332sq m of A-grade office space, with views over the Swan River, Kings Park and the wider Perth area. It also includes the three-storey, 1897-built and heritage-listed Palace Hotel, which includes offices, conferencing facilities and a Meat and Wine Co outlet.

The building also has modern end-of-trip facilities, 103 basement car bays and sits on a corner holding on the city’s busiest intersection of St Georges Tce and William St.

Tenants include global mining and metals company South32, ASX-listed financial services firm Pioneer Credit, Asia’s third-largest office space provider The Executive Centre, and global law firm Norton Rose Fullbright.

The initial burst of deal-making in Perth this year had been led by private players, as tycoons Gina Rinehart and Andrew Forrest bought buildings. But now institutions have followed, with Centuria Capital also buying Allendale Square from Mirvac.