CBH, Telstra get pick of the city

Office landlords and leasing agents are upping the ante to secure key tenants, with competition to get the signatures of CBH Group and Telstra expected to be fierce over coming months.

Grains cooperative CBH Group has begun putting the feelers out in the market to assess its office accommodation options, with a lease that is understood to be expiring in the next few years.

A campaign for expressions of interest, run by commercial leasing agent ACORPP, for CBH’s office requirements closed last month.

Business News understands more than 70 proposals were received to cater for CBH’s requirements of between 5,250 and 6,250 square metres of A-grade office space.

CBH would not reveal the exact timing of the lease expiry of its premises in West Perth, but its corporate services general manager, Mathew Regan, confirmed the group was assessing its options.

“CBH has no short-term plans on relocating, however we will continue to assess the options for office accommodation in the Perth CBD and test the market to achieve the best deal possible,” Mr Regan said.

Perth’s rising vacancy rate has resulted in falling rents and increased incentives for tenants, with industry sources suggesting now is a prime time to shift offices.

JLL managing director John Williams said he was not surprised at the level of inquiry in the market for a blue-chip tenant like CBH.

Mr Williams said he expected Telstra, which has a lease expiring at its Stirling Street headquarters in 2017 and is keen to get into new premises before the end of next year, would also cause a significant stir among office landlords.

However, with a requirement of 10,000sqm, Mr Williams said he would not expect Telstra’s options to be as broad as CBH’s.

One of the buildings expected to be in the mix for Telstra is KS1 at Kings Square, a 23,000sqm, 19-level office building being built speculatively by Leighton Properties.

As yet, a key tenant for KS1 has not been found, with most of the other office space at Kings Square spoken for by international oil and gas giant Shell, health insurer HBF, and building and construction company John Holland.

Mr Williams said Telstra was not the only blue-chip tenant keeping JLL office leasing agents busy.

“One thing about Perth is there is always churn, because we have short-term leases relative to other cities,” he said.

“When you’re getting 35 per cent incentives and your rents have come down 25 to 30 per cent as well, it starts to become quite attractive.”