Dexus scopes Perth tower

The sale process for the Insurance Commission of Western Australia portfolio is close to being wrapped up.

The sale process for the near $800 million Insurance Commission of Western Australia portfolio is close to being wrapped up with the agency drawing Dexus Property Group as a suitor for the last remaining property, Westralia Square Tower.

The listed group had shown interest in the tower, which could complement its existing Perth holdings and also provide some future development upside, at about $140m but a deal is yet to be finalised.

Canada’s Brookfield has also been identified as likely to chase the building but, for now, appears focused on the sale of the $120m Carillon City Shopping Centre it co-owns with Hawaiian Investments, and determining its strategy for developing Lots 5 and 6 of Elizabeth Quay, where it is an exclusive position.

Dexus has big interests in Perth. In 2013, its struck a deal with Leighton Properties to acquire three commercial buildings planned in the Kings Square development for $434.8m. The holdings are split between the listed Dexus and its unlisted wholesale property fund.

Dexus is also tapping the market to find new tenants to fill substantial space at the $500m Woodside Plaza office building in the CBD. It has seen anchor tenant Woodside Petroleum decide to vacate 40,000sq m in the building when it moves to AAIG’s proposed office development at the old Emu Brewery site next year, with accountancy and legal tenants also leaving.

However, if a deal proceeds Dexus could be buying into Perth at its nadir and as a recovery in the leasing market starts to take shape. A sale by ICWA to the local office powerhouse would also mark a return to selling to local groups.

ICWA this month sold the Westralia Plaza complex to Chinese developer Zone Q for about $87m. That sale of the complex at 167 St Georges Terrace left the commission with only Westralia Square Tower at 141 St Georges Terrace on the block.