Slice of $800m Perth office tower up for grabs

Brookfield is selling a one quarter stake in One The Esplanade, Perth.

Canadian property heavyweight Brookfield will look to sell a one quarter stake in the $800m Chevron headquarters in Perth in one of the biggest tests of demand for top end buildings in the WA capital after the pandemic.

The move is partly a bet international and local heavyweights will chase prime office assets amid global share market turmoil, which could drive them into the direct property market.

Investors are tipped to continue their flight to quality, with building values expected to be supported as interest rates are brought down by central banks to offset the impact of impending trade wars.

Perth’s office market has been the strongest performing capital city over the past two years and tenants are still expanding into new premises, with office attendance the highest in the country.

The tower sports southern views over the Swan River.

Buyers are already responding and last year Perth-based Oceania Capital Group snapped up an 11-storey office tower in Perth’s CBD for about $75m. That block at 66 St Georges Terrace was sold by the Andrew Roberts-backed RF Corval.

Brookfield has been backing the growth of the city’s office market. In 2023, it teamed with industry super fund-backed Cbus Property and struck up a venture to develop another premium tower at Perth’s Elizabeth Quay.

That tower, Nine The Esplanade, will sit next to the Chevron headquarters, at One The Esplanade, and they will round out the main office projects in Perth’s Elizabeth Quay waterfront precinct. Tenants are keen on the area and energy company INPEX will shift to the under-construction building, joining other pre-committed tenants EY, Multiplex, Hub Australia and Argonaut.

The value of office towers has dropped in recent years, but listed landlords said in the most recent reporting season values had troughed and premium buildings are now coming back into vogue.

Brookfield has tapped Josh Cullen and Mark Hansen of Cushman & Wakefield and Flint Davidson and Aaron Desange of CBRE to handle the sale of the stake in waterfront One The Esplanade.

The 29-storey premium-grade office tower sports views south over the Swan River and east over the Supreme Court Gardens and Langley Park. The development has been designed to meet the needs of the tower’s anchor tenant. Law firm Herbert Smith Freehills is also in the building.

The premium tower sports end-of-trip facilities, onsite childcare facilities, a gymnasium, executive concierge services, a dedicated tenant app and secure basement parking.

The 56,123sq m building has 54,130sq m of office space and 1993sq m of retail space.

The complex was finished in 2023 and has parking for 136 vehicles.

Just as the pandemic struck in 2020, Invesco took a 50 per cent stake in the then under-construction Chevron building as it was being developed by Brookfield. A year later, Singapore’s GIC bought a 25 per cent stake in the tower for about $220m.

Brookfield bought the Swan River frontage from Chevron in 2019 under an agreement to develop the premium-grade office complex.