Perth’s HBF House could reap $115m

The 11-storey HBF House is on the block.

The country’s second largest health fund HBF Health Limited will bring the Perth office tower it occupies to market in a move that could see it reap up to $115 million.

The fund has put the A-grade building on the block and 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 and would appeal to investors, including Primewest and Singapore players, that have flocked to the city.

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It comprises more than 13,000sqm of A-grade office space over 11 levels in Perth’s Kings Square precinct.

HBF Health chief executive John Van Der Wielen says the asset is 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.

Williams says the sustainable building has 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 51,000sqm of positive net absorption in the last 12 months with the trend forecast to continue.

Freshwater says Perth offers value for counter-cyclical investors as there is a prime yield spread of about 219 basis points against Sydney towers, well above the long term average.

“Perth office assets have recently been highly sought after with investors confident that the Perth office market is being driven upward by increased activity across many business sectors, not just mining.,” he says.

HBF House occupies a high-profile position fronting Wellington St and Telethon Ave, in the Kings Square precinct and the $5 billion Perth City Link project.

The area has 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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