Singapore investor sweeps into Perth office tower

Demand for commercial space in Perth is increasing.

Singapore-listed infrastructure and civil engineering company OKP Holdings has made its maiden property acquisition in Australia, buying a Perth office tower for $43.5 million.

The group has quietly picked up its first overseas property, an office complex at 6-8 Bennett St, via its subsidiary OKP Land. OKP ultimately owns a 51% stake in the office complex, while HSB Holdings, an investment company in Singapore, holds the remaining 49%.

Knight Frank’s Todd Schaffer and Andrew Woodley-Page and JLL’s Tom Nattrass and John Williams handled the sale of the eight-storey East Perth block for Sam and Andrew Buckeridge, sons of the late Len Buckeridge.

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The property near Perth’s Swan River comprises two adjoining buildings — a four-storey building and an A-Grade nine-storey building — as well as a multi-storey car park, that sit on a land area of 3115sq m.

With a net lettable area of about 10,219sqm, the property is close to 68% occupied by a mix of government and corporate tenants, giving the complex a weighted average lease expiry by income of just over six years.

OKP managing director Or Toh Wat says the purchase is a “strategic move” in line with the company’s long-term strategy to diversify earnings and build a recurrent income base.

“We see good upside potential in raising occupancy as we expect demand for offices in Perth CBD to continue to improve over the medium term, given the limited new office supply and strong demand for good quality office space, as well as rising activity in the mining sector which is a major employment driver for the city,” he says.

The mining, utilities and industry sectors have dominated leasing in Perth CBD and with the recovery of the iron ore price since 2015, the volume of leasing transactions has been rising.

The vacancy rate for the Perth CBD dropped from 21.1% last June to about 20.1% by December.

This article originally appeared on www.theaustralian.com.au/property.