20/03/2007 - 22:00

Debt forces rethink at the WA Club

20/03/2007 - 22:00

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Moving to shore up its financial future, the 114-year-old Western Australian Club is seeking buyers or redevelopers for its historic premises at 101 St Georges Terrace.

Moving to shore up its financial future, the 114-year-old Western Australian Club is seeking buyers or redevelopers for its historic premises at 101 St Georges Terrace.

A formal campaign was launched this week to gauge genuine interest in the property, following 18 months of discussions with developers.

In a letter to members last week, president John Goodlad said the club had found it increasingly difficult to service its long-term debt ($2.92 million at end 2005-06) by relying on the rising value of its asset.

“The increasing level of interest payments has made it even more difficult to provide for a cash-flow positive environment,’’ Mr Goodlad wrote. ‘‘Clearly this is not a sustainable practice and the situation cannot continue without jeopardising our equity in the building and our very future as a club.” 

Following  its seventh consecutive net loss last financial year, the club resorted to charging each of its 1,600 members a levy of $275 on top of their annual membership fees, in addition to a commitment to spend a minimum of $90 a quarter on food and beverage.

Knight Frank state director asset services Ian Edwards said calculating the value of the heritage listed property was not a straight forward task as it would require substantial capital expenditure to maintain, and any investor would take this into account.

 “The location is fantastic. There’s no doubt in the current market any new office space there would be taken. But in a normal leasing market, there would be issues with the lack of natural light and small floor plates, which are not conducive to office space,” he said.

The 920 square metre site features a four-storey building to the front, dropping to three-storeys in the centre and a two-storey former warehouse section to the rear.

A plot ratio of 5:1 exists on the property, in addition to a bonus plot ratio of 20 per cent, subject to conditions.

Property sub-committee convenor John Garland said the club was open to ideas on how to get the most out of the site and believed its unique heritage façade, lobby and stairwell would be an asset to any potential development.

While leaving the St Georges Terrace premises was a last resort, he said the club would entertain a move away if it found a location with facilities that ensured its future sustainability.

The club will be taking formal proposals from interested parties until April 4.

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