BGC Development has done the almost unthinkable in current office market conditions, finding an anchor tenant for its under-construction building at 25 Rowe Avenue in Rivervale despite widespread commercial vacancies across the city.
Bunnings will relocate its administrative functions from Welshpool to Rivervale to take up three floors in the nine-storey office building, spanning 4,321 square metres.
The hardware giant is expected to move in in February 2017.
BGC’s 25 Rowe Avenue development also includes a 4.5 star Aloft Hotel, with construction substantially underway.
The project is expected to be completed by December next year.
BGC Development general manager Ross Catalano said securing Bunnings as the anchor tenant was a great outcome for the building and demonstrated its capacity to attract high-quality tenants.
“25 Rowe Avenue has been specifically designed to fill a gap in the office market in one of Perth’s fastest growing suburban locations, highlighted by major developments such as the Perth Stadium as well as a series of high-rise residential and hotel projects,” Mr Catalano said.
“While occupiers in this location have previously been unable to source high-quality office space, 25 Rowe Avenue offers unique accommodation that will attract new tenants to this location.”
Mr Catalano said discussions were ongoing with other potential tenants for the remaining space in the 10,337sqm building.
The Bunnings deal was brokered by commercial agency CBRE, with leasing agent, Andrew Denny saying the deal was the only pre-leasing transaction in 2015.
The current suburban office vacancy rate is 14.6 per cent, according to Y Research, making the deal remarkable considering the amount of space available to tenants.
Y Research’s analysis of the market, released last month, showed new buildings generally struggled to attract tenants, with just over 40,000sqm of space added this year, and around half of it being vacant.
“This represents a significant vote of confidence in the project, and particularly so in the context of the current market,” Mr Denny said.
“25 Rowe Avenue is one of the few new office buildings currently under construction in Perth and its innovative design, large flexible floor plates and sustainability initiatives were a differentiator for Bunnings.”
