German giant leads race for Perth’s HBF Health tower

HBF Health’s Perth office tower is on the market.

The nation’s second-largest health fund, HBF Health, has drawn strong bidding for the Perth office tower it occupies, with German investment house Union Investment Real Estate heading the field of interested parties.

The German group is looking to put its stamp on the Perth market with the purchase of the tower that was put on the block for up to $115 million.

Union Investment has form in Australian property. In 2015, it purchased a $120m tower in Sydney’s Clarence Street, and it has also backed the acquisition of Flight Centre’s $200 million headquarters in Brisbane.

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In Sydney, the Hamburg-based real estate investment manager acquired 155 Clarence Street for about $120 million.

In Brisbane, its complex was developed by Anthony John Group as part of its $600 million Southpoint project at Brisbane’s Southbank.

HBF put the A-grade Perth building on the block in February, saying it may either fully lease the complex, realising the full value, or take 80%, which could see it trade for about $105 million.

The 11-level property, HBF House, was built in 2015. It also drew interest from Asian investors that have flocked to Perth. It comprises more than 13,000sqm of A-Grade office space in the Kings Square precinct.

HBF Health chief executive John Van Der Wielen said in February that the asset was being offered as part of the fund’s continuing focus on the best outcomes for members’ capital.

JLL’s John Williams and Nigel Freshwater are selling the tower but they and the parties declined to comment yesterday.

The sustainable building was marketed as having low forecast capital expenditure and strong depreciation benefits, secured on a 10-year lease at market rent levels with assured income growth.

The Perth CBD has recorded strong positive net absorption in the past 12 months, with the trend forecast to continue.

The WA capital is also drawing counter-cyclical investors as there is a prime yield spread of more than 200 basis points against Sydney towers, well above the long-term average.

HBF House fronts Wellington St and Telethon Ave in the Kings Square precinct. The area has already drawn major corporate and government tenants, with Shell and John Holland occupying adjoining buildings.

The nearby KS1 tower is understood to be almost fully leased, with recent leasing deals signed with P&N Bank, BG&E Engineering, and the federal government.

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