03/10/2008 - 16:08

Brookfield denies City Square problems

03/10/2008 - 16:08

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The credit crunch sweeping global markets is buffeting the property sector in Western Australia, with major developer Brookfield Multiplex denying rumours that the $1 billion office tower City Square was in jeopardy.

The credit crunch sweeping global markets is buffeting the property sector in Western Australia, with major developer Brookfield Multiplex denying rumours that the $1 billion office tower City Square was in jeopardy.

Speculation around Perth has focused on the development and finance costs, as Wall Street's problems have started to impact on WA's key sectors - including mining.

Brookfield refused to comment on whether discussions had been held over the future of the project but confirmed its commitment to the building.

A spokesperson for Brookfield said "the project is proceeding and you can see quite visibly that it is."

The 65,000 square metre project is a major project for blue chip anchor tenant BHP Billiton, which has pre-committed more than 40,000sqm of space for its petroleum, iron ore stainless steel and nickel divisions, among others.

BHP declined to comment on the status of the development.

Developer Saville Australia is facing the prospect that its revised plan for the former Emu Brewery site may not eventuate.

The company will be unable to proceed with its 60,000sqm office tower unless it secures a new joint venture partner, following the withdrawal of Babcock & Brown in the wake of the global credit crunch.

And while Leighton Properties has been rumoured to be considering a stake in the project, Saville is yet to secure a deal.

Brookfield Multiplex is a wholly-owned subsidiary of Brookfield Asset Management Inc, which is listed on the New York and Toronto stock exchanges.

The company is believed to require up to $700 million for the City Square project.

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