08/11/2013 - 10:29

Chevron plans Elizabeth Quay move

08/11/2013 - 10:29

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Energy giant Chevron expects to start building a new Perth waterfront headquarters in three years time after the state government touted the oil and gas giant as the first major owner-occupier at Elizabeth Quay.

Chevron plans Elizabeth Quay move
Planning Minister John Day (centre) shows Elizabeth Quay’s map to Premier Colin Barnett (left) and Chevron managing director Roy Krzywosinski. Photo: Attila Csaszar.

Energy giant Chevron expects to start building a new Perth waterfront headquarters in three years time after the state government touted the oil and gas giant as the first major owner-occupier at Elizabeth Quay.

The government announced today that Chevron will move to the precinct after paying $64 million for a site on the corner of Barrack Street and The Esplanade.

Today's announcement follows long-running speculation that Chevron would be the foundation developer at Elizabeth Quay.

Business News exclusively reported in July 2011 that the oil and gas giant was eyeing the Perth waterfront for construction of a new office tower to accommodate its growing workforce.

The 6,795 square metre site is the first sale from the nine lots available at the waterfront precinct, although two more sites are due to be settled on within two months.

Chevron can build a tower up to a maximum of 36 storeys under the design guidelines for the project, which is estimated to cost between $800 million and $900 million.

Construction of the tower is expected to commence in late-2016, following completion of the public spaces including boardwalks, cafes and parks, which are set to open in the spring of 2015.

Planning Minister John Day said the value of the sale to Chevron may have set a precedent for the state receiving more money in future site sales than originally budgeted.

"This certainly does set a benchmark," Mr Day said.

"In our original budgeting of a gross expenditure of about $440 million for the construction of all of the public works and the associated development, we expected to get at least $170 million back ... but it will certainly be more than that by the time the project is completed.

"We expect to get a substantial proportion of the $440 million investment back but it's hard to be precise about that because the sale of other lots will take place over at least a couple of years."

Mr Day said the Metropolitan Redevelopment Authority had received 14 expressions of interest to build a five-star hotel on site nine and a residential development on site 10, and were now in negotiations with one developer.

As revealed by Business News last month, it is understood the final bidder is the Australian operation of the Far East consortium, working with hotel operator Ritz Carlton.

Mr Day said confidential negotiations were expected to continue on price and how the design would fit in with the development before an announcement was made in about two months.

"A very important part of this process is we're not just selling land to the highest bidder, but (we are focused on) the design of the project and how it integrates with the public space," he said.

Mr Day said the first sale of a site to Chevron would increase interest for the remaining sites.

"The fact that this transaction's now been completed I think will add to a lot of interest which has already been shown in the other land which is being made available," he said.

Premier Colin Barnett said the sale to Chevron was a significant milestone for the $440 million Elizabeth Quay project and a sign of confidence in the future of the state.

"This first sale shows that there is strong demand for the land at Elizabeth Quay, which will be a premium location for business, as well as providing a new way for West Australians and their families to enjoy our waterfront," he said.

Speculation that Chevron would build a new office tower at Elizabeth Quay was dampened earlier this year when the company renewed its lease at QV.1 to 2023.

The company's Perth-based staff are spread across a number of CBD offices.

Chevron said it would not comment on confidential lease matters regarding how its Elizabeth Quay plans will affect its QV.1 lease.

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