$300m complex for Westralia Square II

AFTER a decade of inactivity, plans are under way for the development of the CBD’s biggest vacant space.

The Westralia Square Two site will be home for a $300 million office complex.

Twin towers with large 1800sqm floors will add up to 60,000sqm of office space, which is now in high demand throughout Perth.

Serviced apartments fronting Mounts Bay Road also will be constructed on the 1.6ha site between Mounts Bay Road and St George’s Terrace.

The two-stage proposal follows the recent appointment of joint consultants James Fielding Investments Pty Ltd and Bovis Lend Lease, the construction arm of Lend Lease, by the Packer family’s Consolidated Press Holdings (CPH) to assess the site.

James Fielding Investments director Rodney Leaver said that, while the local commercial property market was still underperforming, the timing was right for a further 60,000sqm of office space.

“Perth’s last round of (office) construction was in the 1980s,” Mr Leaver said.

“We will be building two 21st century high-tech and extremely efficient office buildings.”

Refurbishment options for the site’s Heritage-listed buildings fronting St George’s Terrace are still being decided.

Mr Leaver said James Fielding Investments was now seeking tenants for the building and was confident of gaining pre-commitments.

“Between 1988 and 1993, tenants entered into a lot of long-term, 10 to 12-year leases,” he said.

“Many tenants have outgrown their space and have multi-tenancies in several buildings around the city. These tenants are now looking at their renewal options.”

Major law firm Freehills previously indicated it would consider moving into a development at Westralia Square Two in a bid to accommodate its growing operations.

Freehills presently occupies six floors at the AMP Building and 1200sqm at Austraits Place, William Street. The firm’s lease at the AMP Building expires in early 2003.

The development proposal has been welcomed by the Perth property industry, which is anticipating the current demand for high quality office space to continue to grow in coming years.

“I think (Westralia Square Two) has got a fairly good chance of success,” Colliers Jardine research manager David Cresp said.

“Perth experienced a high demand for office space in 2000 and, though the economy has been slow this year, there won’t be any new supply of office space before 2003 and by then there will probably be some pent-up demand for it.

“I believe the level of demand will support Woodside and one more office building with this level of lettable space.”

Chesterton International research analyst Chris Freeman agreed, saying today’s property market was a far cry from those of the early 1990s.

“When Westralia Square was purchased there was prolific speculative development which far exceeded absorption levels,” Mr Freeman said.

“This resulted in high vacancy levels, low rents, and removed the viability of further construction.

“This situation has now changed and we are seeing low vacancies stimulating rental growth and making pre-committed construction economically viable.”

CPH’s appointment of James Fielding directors, Mr Leaver and Greg Paramor, is a well-placed tactic to reverse the Packer family’s run of outs over the Westralia Square Two site.

Kerry Packer and his (then) partner, Perth property identity Warren Anderson, paid a premium price of $270 million for the vacant site in the heady property days of 1988.

A host of developments have been proposed for the troubled 15,500sqm site in the past 10 years, including a $1.5 billion three-tower office plaza and a $600 million 360-room hotel.

In 1991, the 19-storey Hartley Poynton building was built on the property and sold to the WA Insurance Commission, but the property market crash of the early 1990s stalled any further development.

Despite being based in Sydney, Mr Leaver and Mr Paramor have an intimate knowledge of Perth’s property market.

In the 1980s the Perth-born Mr Paramor co-founded one of Australia’s first fund managers, Growth Equities Mutual, now part of Lend Lease, and Mr Leaver worked in Perth’s property industry for more than a decade.

Mr Paramor and Mr Leaver built the $2.3 billion Paladin property trust and funds management group, selling the management rights and their interest to Deutsche Asset Management in July 2000.

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