(SINGAPORE) Stamford Land Corporation could be selling its Grade A office tower in Perth's central business district for at least A$140 million (S$179 million).
According to The West Australian, the 13-storey Dynons Plaza at Hay Street is under construction and Stamford Land is 'gearing up to place the asset on the market'.
Industry sources told the Australian paper that the building has a value of A$130-140 million. Chevron will be leasing the entire place - which has 13,000 square metres of office space - when it is ready in the next few weeks.
'It is a new building, a quality long-term lease, so those sorts of assets are attractive to the market,' said Colliers International director of investment sales Ian Mickle to The West Australian.
BT understands that Stamford Land is expecting offers of more than A$140 million. This could reap a considerable profit for the company given that the total cost of buying, holding and developing the land could have come up to some A$80-90 million.
Dynons Plaza is located next to Woodside Plaza, which serves as the headquarters for another energy firm Woodside Petroleum.
The Dynons Plaza site is part of a bigger parcel which Stamford Land bought for A$20 million in 1996. The company has sold the other parts of the land.
The West Australian reported that Stamford Land had originally planned to build a five-star hotel at the Hay Street site, but it later constructed an office block when there was no business case for a hotel.
The change seems to be working in Stamford Land's favour. BT understands that Chevron's lease for Dynons Plaza lasts for ten years, and its rents are set to escalate every year. Despite this, Stamford Land is said to be selling the site to focus on its core business of running luxury hotels.
Stamford owns and operates Stamford Hotels in Australia and New Zealand. The Singapore-listed counter gained 1.5 cents to close at 47.5 cents yesterday.
Source: Business Times, 30 Mar 2010