Singapore-listed Starhill Global Real Estate Investment Trust has snapped up Perth's Plaza Arcade from two WA investors for $48 million and flagged plans to revamp the area.
The Trust also owns the David Jones Building next door and buying the centre positions it to upgrade its holdings along the retail stretch in the Perth CBD.
A revamp is in Starhill's plans as it sees Perth's mining driven economy as creating more potential for new international brands to break into the city than to expand in Sydney and Melbourne.
The trust manager cited moves by retailers like Chanel, Prada and Apple to open in Perth and indicated there was space that could be created to accommodate new retailers.
"There are synergies to be reaped between our existing David Jones Building and the adjacent Plaza Arcade. Both the Savoy Hotel and Plaza Arcade have unutilised space on the upper levels," YTL Starthill Global chief executive HO Sing said.
The said connections and potential integration and use of these unutilised space between the two buildings "will be studied at a later stage".
The Plaza Arcade was sold by local businessmen Con Berbatis and George Atzemis, with the price reflecting a yield of 7.8 per cent. They owned the property for 10 years and undertook a major refurbishment in 2006.
The sale, foreshadowed by The Australian Financial Review, was negotiated by Lease Equity's managing director, Jim Tsagalis. He said the Plaza Arcade was being sold as part of an ongoing investment strategy employed by the pair.
The three-storey centre is heritage-listed and comprises about 30 specialty tenancies. Tenants include brands like Lush, Just Jeans, Sunglass Hut, TBar and Billabong. The property spans a net lettable area of about 2,322 sqm and was 97.6 per cent occupied at the end of December.
The Deal is expected to be completed within the first quarter of 2013 and will be funded by a combination of debt and proceeds raised from Starhill Global REIT's 2009 rights issue. The trust owns properties in Singapore, Malaysia, Japan and China, as well as the Perth holdings, valued at about $S2.7 billion.