Capricorn ponders Forge’s old digs

Collapsed engineering firm Forge Group’s old premises in West Perth have firmed as a likely landing spot for automotive parts buying group Capricorn Society, which is looking to consolidate its office requirements into one location.

The building, located at 28 Troode Street in West Perth, has been vacant since Forge’s collapse in February this year with debts exceeding $800 million.

About 1,300 people lost their jobs in the collapse, while liquidators at Ferrier Hodgson declared in March that shareholders’ stock holdings were worthless.

Capricorn group chief executive Greg Wall told Business News the group was considering a number of new locations to house its 116 Perth-based staff, with the 2,150 square metre building at 28 Troode Street among its targets.

The cooperative’s staff is spread across three buildings, with most situated at 172 Burswood Road in Burswood.

However Mr Wall would not confirm whether the group had committed to buy or lease the property from its owner, Ascot Capital, saying he hoped a decision would be finalised within the fortnight.

Ascot Capital’s Greg King also refused to comment on a potential transaction when questioned by Business News.

The building was constructed in 2012 by Merit Projects, and was designed by the Buchan Group.

Merit valued the project at $8.3 million at the time of construction.

Meanwhile, research by commercial real estate agency Savills showed the West Perth office market had been largely quiet in the first few months of the year, with zero significant sales and only three major leasing deals recorded in the first quarter of 2014.

The leasing transactions included Roc Oil taking up 524sqm at 98-100 Havelock Street, Ventnor Capital and Alto Capital signing on for 228sqm at 16 Ord Street, and Austagencies taking a 192sqm lease at 35 Havelock Street.

In the 12 months to the end of March, just $15 million worth of West Perth office stock was sold, Savills said, a fall of 85 per cent on the previous 12 months and significantly below the five year average of $74 million.

“The main reason for such limited levels of transactional activity is that very little stock is being brought to the market,” Savills said.

“West Perth is particularly tightly held.”

Savills said it expected office sales to remain slow for the remainder of 2014, but tipped a slight uptick in the leasing market.

“Due to the limited amount of new supply, vacancy is expected to remain around the current level of 9.2 per cent,” Savills said.