Commitment no bar to development proceeding

FOLLOWING the trend towards smaller boutique commercial developments, Cape Bouvard will go ahead with its $20 million CTA Building project, with or without tenant pre-commitment.

WA Business News understands that the boutique office development received verbal planning approval from Planning and Infrastructure Minister Alannah MacTiernan in January and Cape  Bouvard is now awaiting formal approval.

Leasing agent NSC Corporate director Steve Carrulli said the project did not have any tenants signed up at this stage, however, unlike the other potential new office developments proposed for the CBD, the CTA Building was small enough to go ahead without any tenant pre-commitment.

The project will involve the addition of seven new levels on top of the site’s existing car park, yielding 7,000 square metres of commercial office space, and developing a new gym at The Esplanade level.

Mr Carrulli said he believed the CTA Building, with its unobstructed river views, generous parking allocation and efficient floor plates, was the right product for the Perth market.

“We have had strong tenant interest….the majority coming from the professional service type groups who like the central location, such as legal and accounting firms.”

Mr Carrulli said about three tenants were waiting in the wings for final development approval before committing.

He told WA Business News that the current level of pre-commitment required by financiers was making it much more difficult for developers to build buildings without the required tenant critical mass.

Traditionally Perth tenants have found pre-commitment unpalatable with most of Perth’s major towers, such as Central Park, QV1 and Westralia rising without conditions of pre-commitment.

Mr Carrulli said financier’s requirements and tenant’s reluctance to commit to anything that had no guaranteed certainty of going ahead was giving rise to developments that were less of a punt and less contingent on pre-commitment.