Property firm Charter Hall Group has finalised negotiations to buy the Raine Square office and retail complex in central Perth for $458 million.
Charter Hall announced today it has formed a partnership owned equally between its Core Plus Office Fund, a domestic super fund, and a global institutional partner to purchase the building.
The Raine Square development was placed into receivership in January 2011, after developer Westgem Investments failed to meet a $50 million loan repayment to Bankwest and Bank of Scotland.
Receiver Korda Mentha has now sold the recently-opened development, which comprises the Bankwest Place office tower, the Raine Square retail precinct and two hotel premises.
The complex occupies a total lettable area of 61,564 square meters, which comprises 45,000 square metres of prime office space, 9,831 square metres of retail space, and 5,736 square metres located within the two hotels.
The sale was negotiated through CBRE and Jones Lang LaSalle.
Charter Hall flagged last month that it was in negotiations to acquire the asset, as well as Westfield's Innaloo Shopping Centre.
Charter Hall joint managing director David Harrison said the development would deliver strong returns, despite the slowdown in resources sector.
"We are confident about the longer-term outlook for Perth and are attracted to the security of a non-resource tenant of Bankwest's calibre in this active precinct," he said in a statement.
"We also believe we can add value to the non-office components of the complex, utilising our retail experience to extract greater value for our investors."
KordaMentha's Mark Mentha said the sale was a good result for the Perth market.
"The interest from both local and international parties was extremely pleasing," he said in a statement.
"There was very strong competitive tension from a large number of highly qualified parties."
CBRE Executive Managing Director Scott Gray-Spencer said the sale had been hotly contested.
"It was a highly competitive process with many offshore and local groups competing to secure this trophy asset," Mr Gray-Spencer said
"Investors in today's market are searching for high quality CBD properties such as Bankwest Place which offer secure, blue chip tenancy covenants and future growth potential."
Charter Hall Group shares have risen by 5.2 per cent, or 19 cents, to $3.84 following the announcement.
