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Boost for the west end

THE $250 million Woodside building is expected to redefine Perth’s west end shopping precinct and set a new benchmark for rental levels when it opens in August 2003.

The city’s west end first stole some of the spotlight from the Hay and Murray Street malls in 1991 with the opening of the QV1. Woodside’s 26-storey building is set to further boost the precinct’s profile.

To house about 1,800 workers, the tower is tipped to generate a huge amount of pedestrian traffic through the precinct.

Real Estate Institute of WA public affairs director Lino Iacomella predicted the effect of the Woodside building on the west end would be similar to that of the QV1 building when it first opened.

“In 1997 REIWA’s pedestrian survey recorded a 26 per cent jump in the amount of pedestrian traffic in the west end of Hay and Murray streets since the previous survey in 1993,” Mr Iacomella said.

“This reflected the big number of office workers located in the west end with establishment of QV1.

“The Woodside building will inevitably increase the numbers and movement of people through the CBD west end.”

And with the opening of the new David Jones, Myer Megamart and Woolworths stores in Murray Street, the pedestrian flow from the west end to the mall was likely to strengthen, he said.

“Those stores will be a magnet to those working in the west end … and retail outlets in this path will benefit,” Mr Iacomella said.

Chesterton International valuations director David Burgess agreed the increased pedestrian flow would provide a significant boost to the blossoming shopping district.

“Since the King Street redevelopment initiative was put in place by the City of Perth, King Street has carved a niche as a boutique retail strip,” Mr Burgess said.

“This boutique trend has flowed onto Murray and Hay streets with the addition of shops.

“The increase in pedestrian traffic brought about by Woodside will see this trend continue at a more prolific rate.

“This improvement in retail trade for the area should also lead to substantial refurbishments of retail outlets, especially on Milligan and Hay streets.”

An increase in west end rental levels also was predicted as an outcome of the boost to retail turnover.

“Rents in King St are currently reaching in excess $800 a metre. By contrast, Milligan Street is currently achieving around only $200 a metre – providing significant room for rental growth,” Mr Burgess said.

Jones Lang LaSalle property analyst Frank Sorgiovanni said the premium-grade building had already set a new benchmark in office rental rates, which had been set at $360/sqm.

Mr Sorgiovanni expected the office space not used by the Woodside operation to be in high demand, and would be absorbed before the building was completed.

And while they may not be moving into the new building, other firms were likely to start considering west end addresses.

This, in turn, could put pressure on A and B-grade building rents, forcing them to new levels.

Small shopkeepers close to the Woodside building are already considering their options.

Many believe rents will be too high for them and are already looking for new premises nearby so they do not lose too much of their existing trade.

Some of the shopkeepers will be squeezed out as their landlords redevelop buildings near the Woodside tower to cash in on the improved rental opportunities.

Traders in the Hay and Murray street malls believe they will be in for a torrid time with pedestrian flows moving towards the west.

However, Perth Lord Mayor Peter Nattrass is not convinced the Woodside building’s impact will permanently shift the focus to the CBD’s west.

“I’ve seen over the years that, when you get a significant development, you get stories of how it’s going to be the impetus for this end of town or that end of the town,” Dr Nattrass said.

“When the Hyatt building went up, the east end of the city was going to be it. Now we have the Woodside building going up. Next we’ll have the eastern gateway. Development will swing like a pendulum.”

Mr Burgess said success of the city’s west end would not be the sole result of the Woodside building, noting the proposed $300 million Perth convention centre and apartment developments also would have a significant impact on the area.

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