Centuria and MA Financial Group have formed a 50:50 joint venture to secure Perth’s Allendale Square office tower for $223 million, reflecting a 7.25% capitalisation rate. 

Located at 77 St George’s Terrace, the 31-storey office building provided 25,908 sqm of office accommodation and 2,745 sqm of retail space. 

The building’s location recently attracted a positive re-rating value due to its proximity to Elizabeth Quay’s substantial regeneration activity.  

The Elizabeth Quay regeneration has benefitted from new food and beverage offerings, The Ritz Carton Hotel opening, and new residential towers in recent years. 

Centuria Joint CEO Jason Huljich said Allendale Square provided a great counter-cyclical investment opportunity being acquired with embedded capital value and within a market that benefits from strong tailwinds.  

“Perth has the country’s highest occupancy rate among all capital cities with a 71% occupancy rate and the market is further supported by a strong outlook for tenant demand throughout the medium term,” Huljich said.  

“Furthermore, the property benefits from its close proximity to Elizabeth Quay, which is Perth’s answer to Sydney’s Barangaroo.  

“Significant redevelopment is being completed within the quayside area in the short to medium term, which extends across the same period as the fund’s term.  

“This A-Grade office building provides direct access to the new, rejuvenated waterside precinct while being in the heart of Perth’s CBD.”  

MA Financial Group Joint Chief Executive Officer Julian Biggins said the calibre of Allendale Square meant it was well positioned to take advantage of the flight-to-quality trend occurring throughout the office market.  

“This is particularly relevant in a market like Perth’s CBD where the sub-lease vacancy is at its lowest in a decade,” Biggins said.  

“Prime quality investments are set to capture growth as rising costs constrain new supply and upward pressure on economic rents increases.” 

In recent years, the building has undergone $62 million worth of refurbishment works.  

The tower has an 85% occupancy rate and a 5.8-year weighted average lease expiry (WALE).  

Under the joint venture, Centuria will provide property management for the asset while each party will be responsible for the asset management of their respective investment funds. 

The transaction is the second JV deal between Centuria and MA Financial, following its acquisition of ‘The Black Stump’ office building at 25 Grenfell Street, Adelaide in October last year.  

Cushman & Wakefield’s Josh Cullen and Colliers International’s Adam Woodward facilitated the transaction.