The property syndicate will aim to offer investors an average two-year income yield of 9.11 per cent and potential for capital growth through investment in an A-grade office building located in the Perth CBD.
Charter Hall said Western Australia continues to provide the strongest returns for direct property investment, which was demonstrated by the latest results from Investment Property Databank for the year ending September 2013.
Charter Hall research manager Chris Freeman told InvestorDaily the return performance for Perth was 11.6 per cent for the office sector and 10.7 per cent for the retail sector.
Both results were above the national benchmark of nine per cent for broader property.
The industrial sector generated the largest returns with a growth of 15.4 per cent for the year to June 2013; September figures have not yet been released.
Charter Hall head of direct property division Richard Stacker said while the growth of the Western Australian economy is slowing as the mining industry moves from construction to output phases, the factors leading to a strong office market performance still remain.
Mr Stacker said population growth had doubled the national average in the past 12 months and the unemployment rate was considerably lower than other states, at 4.3 per cent.
“It is true that WA’s employment growth has slowed since 2012 as the mining investment boom crests. However, at 1.4 per cent for the year to October 2013, it remains well above the 0.8 per cent recorded by Australia as a whole,” he said.
Mr Stacker said he expects strong demand from SMSFs for investment in direct property in 2014, as it provides “self-directed investors with quality assets with lower gearing, conservative payout ratios and increased transparency”.
SMSFs already currently make up 60 per cent of Charter Hall’s investor base.
“Australian direct property has become a popular home for retail investors looking for alternative investments that have a return profile which is less correlated to equity markets and other asset classes, which can be vulnerable to swings in returns,” Mr Stacker said.
