Self-Storage Conversion Planned for Perth Office Block

An inner-city office block previously tenanted by a bank and largely vacant for a decade will be transformed into a storage facility after changing hands for $6.4 million.

The property is the former Bankwest data centre, known as Gateway Commercial and located at 148a Adelaide Terrace, extending through to 199 Hay Street, East Perth,

The nine-level property is four blocks east of the Perth Town Hall.

It was brought to the market by Stephen Harrison and Michael Milne of RWC WA, with private agent Cooper Egan, via an expressions-of-interest campaign.

RWC WA represented the strata ownership of the building, which comprises 32 offices across four floors for a gross building area of 3400sq m plus 110 carparking bays across five split levels.

Harrison, RWC WA joint managing director, said that the property had been acquired by a private Perth developer who planned to convert the building to a storage-unit facility to be operated by Storage King.

Another storage facility, National Storage East Perth, is three blocks north of the site.

The property was mostly vacant for the past 10 years.

Harrison said that shifts in the office market had required a new strategy for leasing the building, including incentives for tenants, which the 20 or so strata owners of the asset had not been able to agree on.

▲ The asset includes 110 car spaces across five split levels.

“East Perth is Western Australia’s highest density precinct, creating high demand for storage units,” Harrison said.

The appeal of self-storage continues apace as the fundamentals for its growth strengthen, including the rise of downsizers, and rising rents and shrinking home sizes reducing in-home storage.

While always solid, interest and investment grew remarkably in the subsector during the pandemic and has continued to soar.

Investors and owners are being drawn to self-storage for its low set-up costs and equally low risk, including occupancy rates nudging 90 per cent.

And with the office sector continuing to struggle, investors are redeploying capital in the subsector as a safe harbour.