Clough’s short-list conumdrum

PERTH-BASED engineering and construction giant Clough Ltd has not included any existing buildings in its short list for office space between 12,000 square metres and 14,000sq m  in Perth’s commercial property sector.

According to industry sources, Clough has short-listed the major developments slated in Perth, including the City Square project, Future 239, Milligan Square, ING Real Estate’s Harbour Town site and commercial space in Norm Carey’s Emu Brewery site development.

There had been speculation Clough would select an existing building for its new tenancy, with 1 Adelaide Terrace or the Seven Oaks building in Cannington considered the most likely candidates.

Clough announced to the market late last year its plans to consolidate its disparate operations to a location in the CBD or city fringes, which it plans to occupy by early 2007.

One source said that Clough had a preference for the western end of the city, however the company was not ruling out developments in the central CBD. Another source said the Hawaiian Management/Mirvac Fini development, Milligan Square, had attracted great interest. The joint venture group has development approval for an 8,950sq m office building on the site, however the site has capacity for a building up to 14,000sq m.

While there has been industry speculation about Clough tying its pre-commitment to a building contract it is understood that the engineering group is not considering that approach.

Most major development proposals have asking rents of $250 to $400/sq m and one industry pundit said that, if these buildings were to go ahead, developers had to meet market demand for more realistic leasing rents.

But it is understood that, while Clough is currently considering these proposals, if an appropriate existing building was to become available it would certainly be considered as it would enable Clough to access current wholesale rents.

Appointed tenant advocate Grant Samuel Property director Matthew McNeilly declined to comment.