MA Financial joins with Centuria Capital for Perth Allendale Square play

Listed asset manager MA Financial Group is joining forces with Centuria Capital to acquire Perth’s Allendale Square for about $225m.

Allendale Square was pitched as a building that could be repositioned and upgraded in future while also spinning off a healthy ­income

Listed asset manager MA Financial Group is set to become the latest player to take a hand in the Perth office market, as it joint ventures with Centuria Capital on acquiring the city’s Allendale Square for about $225m.

The pair are buying the building in a 50/50 venture and will likely launch separate funds to hold the asset which they have teamed to acquire from Mirvac as the Perth office market gains momentum.

They have worked together before and last October MA Financial Group and Centuria Capital joined forces to acquire landmark Adelaide office tower Grenfell Centre for close to $167m.

The acquiring partners each invested $83.3m to take an equal stake in the “Black Stump” building on Grenfell St, which is home to major government tenants including SA Health and PIRSA (Department of Primary Industries and Regions).

Perth is now being billed as a counter-cyclical opportunity which offers high potential for growth in both rents and capital appreciation over coming years. Centuria has told investors that it is buying below replacement cost and the building benefits from a recent $33m capital expenditure program.

The tower is on a prime corner St Georges Terrace address, with the area being rerated due to Perth’s Elizabeth Quay precinct development. The complex is 84 per cent occupied and it has a weighted average lease expiry of 5.9 years.

Centuria said that there were immediate leasing opportunities to capture demand from quality tenants and the complex has strong ESG credentials with a four-star NABERS energy rating.

Mirvac’s offer of Allendale Square is being handled by Cushman & Wakefield and Colliers, and earlier this year another suitor, funds manager Fortius, undertook due diligence.

The resources-backed capital city has emerged as one of the safest markets in Australia, with little impact from the coronavirus crisis and mining companies in expansion mode.

Allendale Square was being pitched as a building that could be repositioned and upgraded in future while also spinning off a healthy ­income.

When the asset went on the block Mirvac said there was investor demand for well-located CBD office assets that would have exposure to the positive cycle in the WA mining and minerals industries.

Mirvac in 2017 completed a redevelopment of the asset that included updating the streetscape entries and underground food court. The asset has about 25,800sq m of office space, 3200sq m of retail space and 84 car spaces.