21/08/2015 - 14:15

Inpex last big name to drop anchor

21/08/2015 - 14:15

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Oil and gas producer Inpex has emerged as the last potential anchor for a significant new commercial development in the CBD, following Rio Tinto’s decision to remain at Central Park.

Inpex last big name to drop anchor
FLOW ON: Rio Tinto’s lease extension at Central Park has cast doubt over development at Elizabeth Quay. Photo: Attila Csaszar

Oil and gas producer Inpex has emerged as the last potential anchor for a significant new commercial development in the CBD, following Rio Tinto’s decision to remain at Central Park.

Business News understands the Rio Tinto deal, which will result in the mining giant keeping its current premises at Central Park until at least 2030, has not yet been formalised, but official documentation is expected in coming weeks.

Sources suggest there is also a possibility that Rio will take up more space in Central Park than it currently occupies, while its branding is expected to be installed on the building in coming months.

Rio’s commitment at Central Park, first reported online earlier this week by Business News, all but takes it out of the running as the anchor for a new office project, following long-term speculation it would underpin Brookfield Property Partners’ plan to construct a two-tower project at Elizabeth Quay.

However, Inpex is firming as a potential prospect for Brookfield, and other commercial developers, as it puts the feelers out in the market for an office tower it can call its own.

Inpex employs around 900 people at its main headquarters in Perth, at 100 St Georges Terrace, where it occupies six floors from level 17 to 22.

Inpex has been looking to increase its presence in Perth for some time, while Business News understands part of that strategy would be to have its name up in lights in a prominent position on the Perth skyline.

But with an office vacancy rate expected to hit around 20 per cent by the end of the year, a new development is not the only option for Inpex.

At Kings Square, developer Leighton Properties and owner Dexus Property Group are yet to find a tenant for the 23,156 square metre KS1, however, sources suggest that may not be a prominent enough location to attract Inpex, which would prefer to be located on St Georges Terrace.

Telstra had previously been linked to KS1, but Business News understands a suitable deal has not been reached, despite the nation’s largest telecommunications operator actively looking for more than 10,000sqm of office accommodation.

Another large space occupant, CBH Group, ran an expressions of interest campaign earlier this year for between 5,250 and 6,250sqm of A-grade office space, but it is understood that the grains cooperative has no short-term plans to relocate, but was rather assessing its options in a tenant-friendly market.

Dexus Property Group’s 29-storey Woodside Plaza could also be a solid option for Inpex.

Woodside Petroleum’s new headquarters at Capital Square is rapidly rising out of the Old Emu Brewery site on Mounts Bay Road, with construction contractor Brookfield Multiplex making swift progress on the 28-level tower.

That project is expected to be completed by the end of 2018, coinciding with Woodside’s lease expiry at its namesake headquarters.

Dexus is known to be making preparations for Woodside’s departure, with Inpex likely to be firmly on the radar for the institutional landlord.

At Elizabeth Quay, Rio Tinto’s apparent withdrawal from the market isn’t the only cloud hanging over the development.

Multiple sources have suggested oil and gas giant Chevron has pushed back the required construction start date under its contract with the Metropolitan Redevelopment Authority, which was previously towards the end of next year.

That would mean any construction on its new headquarters would not start until the end of 2017.

Earlier this year, Brookfield Property Partners’ Kurt Wilkinson told Business News that if the developer were able to find a suitable tenant, the absolute earliest it would complete a new project at Elizabeth Quay would be 2019 or 2020.

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