ING to take business ‘down’ the terrace
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ING Australia’s Western Australian business, including its real estate division, will move St Georges Terrace locations from its prime Central Park premises to take up new offices in the Forrest Centre when its lease expires on August 1.
ING currently occupies half of the 19th floor of Central Park, facing the river, where its WA funds management, superannuation, life insurance and commercial real estate businesses are headquartered.
It has the option over the remaining space on the floor but hasn’t needed the additional capacity, and has let the surplus space to resources giant Rio Tinto.
Rio is a major tenant in Central Park and is looking for additional floor space to accommodate potential future expansion.
With the current market for CBD office space particularly tight, Central Park management is aiming to let full floors when tenants’ leases expire.
As a result, ING, a 10-year Central Park tenant, has been squeezed out of its current premises, with Rio reportedly prepared to take an option for the full-floor at around $450 per square metre, to house a special projects group or other expansion, as the business requires.
It is a sign of market forces and the buoyant state of the resources sector that Rio may be prepared to take the lease on the floor at an annual cost of around $500,000 for space it may not initially even use.
It is believed that ING is happy with its new CB Richard Ellis-managed Forrest Centre premises, with the WA operations of the global financial services player to take on an entire floor, fully utilised, at around $375/sq m.
However, it is understood that ING management has committed with some reluctance to some terms of the new rental agreement, which locks it into a seven-year lease and commits to rent reviews in years two, four and six, but with no provision for a review if CBD office market rents should soften.
But, faced with a move to either West Perth or East Perth, the company decided that its preferred option was to maintain a St Georges Terrace headquarters.