06/08/2008 - 22:00

Creating space in West Perth

06/08/2008 - 22:00

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A wave of new office projects in West Perth and the western end of the city will provide some much-needed supply to the area, which has the tightest office market in the country and a vacancy rate of zero, according to the Property Council of Australia (WA)'s office market report.

A wave of new office projects in West Perth and the western end of the city will provide some much-needed supply to the area, which has the tightest office market in the country and a vacancy rate of zero, according to the Property Council of Australia (WA)'s office market report.

The latest of the new projects is being directed by Nedlands-based Qube Property Group, which has lodged a development application to build a 10-storey office tower at 999 Hay Street.

The $48 million project, designed by Eames Architects, will be the biggest commercial project undertaken by the group to date.

It will contain a total of 10,000 square metres of office space, boosted by a plot ratio bonus from a heritage building on Murray Street.

Qube's Russell Hawkins said the company was currently negotiating with a potential tenant interested in leasing 50 per cent of the new space.

Over the freeway, three super-blocks bounded by Wellington, Coolgardie, George and Murray streets are either mooted for or commencing development.

The first of these - a 5-storey office building at 789 Wellington Street - has been approved by the City of Perth.

Owned by Westmain Corporation Pty Ltd, which is directed by Brian Swain, the $15 million project will contain about 5,500sqm of office space and 85 car bays.

Ajacent to this site are two lots on George Street, covering about 3,400sqm, which are to be converted to an 8-storey office tower.

While the new building is yet to be approved, the project will require the demolition of two existing buildings, one of which houses Ace Tutors and event management firm, Look Creative, while the other is the showroom of Direct Office Furniture.

The third site on the block, covering more than 4,100sqm, contains the offices of ComputerCORP and was sold last month by the company's founders for just under $20 million to a private investor.

While there are no immediate plans to redevelop the site, WA Business News understands that option may be considered in the longer term.

According to the Property Council of Australia (WA), developers will only add about 6,500sqm of office space in West Perth this financial year, down from more than 9,900sqm built in the year to July 1.

However, financial year 2009-10 is expected to be more productive, with about 16,300sqm of space forecast to come on line.

With much of this space pre-committed, companies priced out of the CBD will be forced to relocate to the emerging suburban market.

In a statement, the Property Council said tenants had absorbed the final 104sqm of space in West Perth since its January report was released.

"This is the first time in the 25-year history of the office market report that a market has no space physically available," the council said.

This time last year, there was 1,500sqm available for lease in West Perth, which has about 371,000sqm of stock in total.

Other projects that may add to supply include a proposed second tower of 8,000sqm by joint venture partners ING and Lewis Land, which are developing the 11,880sqm Wellington Central project.

To be completed next year, the $81 million building will be the largest of the new West Perth office towers.

West Perth has continued to attract interest from the investment market as well, with Pivot Group selling its 18-32 Parliament Place site to developer Houssean Pourzand last month for $41 million.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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