Engineers keen on 1 Adelaide Tce

SEVERAL engineering firms are considering 1 Adelaide Terrace as a tenancy location once Woodside Petroleum vacates it early next year.

WA Business News understands that, among the leasing deals currently in negotiation, engineering firm Lycopodium Pty Ltd, currently located in Belmont, is planning to take out a 3,000 square metre tenancy in the building.

The building is also considered to be high on the list for the State Government’s recently announced requirement for between 12,000sq m and 15,000sq m, designed for use by three new units that will service government agencies.

The spike in leasing activity is good news for building group Baulderstone Hornibrook, which agreed to take on Woodside Petroleum’s lease as part of a $250 million deal to build the energy group’s new headquarters at 240 St Georges Terrace. 

Earlier in the year there was speculation that it would be difficult to fill the 23,000sq m vacancy left by Woodside, causing Baulderstone Hornibrook to wear the cost of the lease until its 2008 expiry.

Jones Lang Lasalle director office leasing David Evans said there was significant interest being shown in 1 Adelaide Terrace.

Mr Evans said there were several leasing deals in negotiations, which the agency hoped to conclude in the New Year.

Hopes are high for a stronger CBD office leasing market in the coming year, with a soon-to-be-released Jones Lang Lasalle report indicating a turnaround in the leasing market in 2004, primarily driven by resource companies.

Mr Evans said a sensitivity analysis of investment dollars going into resource projects, and numbers of CBD office workers, forecast a positive 15,000sq m net absorption of office space next year, followed by a positive 25,000sq m net absorption in 2005.

In comparison, the 2003 forecast was 15,000sq m, Mr Evans said.

“There will be a spike of 15-16 per cent office vacancy in the middle of next year, after that it will turn around quite quickly,” he said.

Mr Evans said the report’s figures were dependent on no new major office building going ahead.

He said the market could only sustain being drip-fed office supply.

As 2003 comes to an end a number of firms are wrapping up leasing deals.

After an extended search for alternative office locations, national law firm Deacons will remain in the BankWest Tower for a further 10 years.

The BankWest Tower has also attracted insolvency group Ferrier Hodgson, which will relocate from 12 St Georges Terrace and take out level 26.

The former AMP building at 140 St Georges Terrace has experienced another leasing success by securing serviced office provider Servcorp to take out 1,101sq m on the building’s top floor.

Servcorp joins the growing list of recently committed new tenants to the building, including Jackson McDonald, Iluka Resources and Rothschild.

Together with the renewal of lease with GRD Minproc, more than 11,900sq m has been leased in the past five months, representing just over 40 per cent of the entire building.

CB Richard Ellis director commercial leasing Andrew Denny said 140 St Georges Terrace had been the leasing success story of 2003 in the Perth CBD.

“This year has seen 11 of the 28 floors in the building totally refurbished, with all but one of the 11 leased prior to the completion of the floor refurbishment,” he said.