Oceania swoops on Perth tower as RF Corval exits

The office sector is making a late-year comeback, and industry experts say the sale signifies a turning point in the West Australian capital’s commercial market.

Oceania Capital Group has bought 66 St Georges Terrace

Perth-based Oceania Capital Group has snapped up an 11-storey office tower in Perth’s CBD for about $75m in the West Australian capital’s largest office deal in two years.

The block at 66 St Georges Terrace was sold by the Andrew Roberts-backed RF Corval in a deal for the 11,253sq m, A-grade building brokered by WA agency Cygnet West. It drew bids from five qualified parties and shows depth is returning to the market.

RF Corval had picked up the St Georges Terrace building from Canadian group Oxford for $72m in 2019, as it sold down buildings from the Investa Office Fund portfolio.

“We are pleased to announce the acquisition of 66 St Georges Terrace, our second major investment in Perth,” said Oceania Capital Group’s Vanessa Hudyana.

“This A-grade building, located in the CBD, aligns with our core value-add strategy, offering strong tenancy fundamentals and significant potential.”

The premium tenant roster includes several WA government departments, as well as top corporate occupiers, including Fortescue, NTT, and Datacom.

RF Corval chief investment officer Oliver Picone highlighted the turnaround and subsequent sale of what had been an underperforming asset.

“Following the execution of an active management strategy, which took the occupancy of the building from 50 per cent when we acquired it to be effectively full now, we decided to dispose of the asset in line with our investment horizon,” Mr Picone said.

“While this involved selling into a relatively soft investment market, we managed to achieve a price above what we originally paid for it, which was pleasing.”

The deal was brokered by Cygnet West Commercial Agency partners Wayne Lawrence and Tory Packer, and is the largest office deal in Perth since Mirvac’s $223m sale of Allendale Square in late 2022.

“Although there have been some smaller-scale office transactions, this deal marks the first major CBD office sale for the past two years,” Mr Lawrence said.

“We think this transaction signals a turning of sentiment for the office sector, with yields now more attractive than other asset classes and the anticipated work-from-home impacts on occupancy not really eventuating in Perth.

“The offshore-backed private buyers seem to have more conviction in this market and for good reason – they have bought the last two office buildings that have sold on the Terrace.”

Ms Packer said the property’s position in Perth’s tightly held CBD core, in close proximity to Elizabeth Quay, combined with its tenancy profile, attracted interest from a range of local, national and offshore investors during the off-market targeted campaign.

“The transaction, which is one of the most significant property transactions in Perth in 2024, demonstrates an uptick in confidence in the commercial property market and the enduring appeal of well-located, quality assets with strong fundamentals,” Ms Packer said.

“Perth has experienced recent net effective rental growth and a downward trend in vacancy, driving investor confidence in the office asset class.

“Continued growth in population and employment in WA have contributed to Perth now having the highest number of workers in the CBD that we have ever recorded.”