Perth is assured of at least one new office tower, with expressions of interest open for developers to purchase 140 William Street, but industry players have warned that more space is needed to cope with demand.
Perth is assured of at least one new office tower, with expressions of interest open for developers to purchase 140 William Street, but industry players have warned that more space is needed to cope with demand.
The State Government has formally opened expressions of interest for developers wishing to purchase the 0.88-hectare site, located above the yet-to-be-constructed Wellington Street train station, with a 15-year pre-commitment to lease 22,000 square metres.
The potential sale and leaseback of the Albert Facey House leasehold of 9,343sq m is also included as part of the process.
Competition for the site is expected to be strong, with a $25 million price tag likely.
In line with the State Government’s sustainability objectives, the office building on 140 William Street will be required to have a five-star ‘green rating’.
The office space is expected to be complete by June 2009 following a decision by state cabinet on the preferred proponent in June next year.
The Western Australian Planning Commission is the owner of the site, and LandCorp has been engaged as the project manager.
When complete, development on the site is expected to exceed 40,000sq m.
Developer Luke Saraceni, who is planning to turn his adjacent Raine Square site into a 75,000sq m development, said his company, Saracen Properties, may be interested in the 140 William Street site.
“We are interested either way because there are obviously a lot of synergies between the two develop-ments that need to be worked out to get the right mix,” Mr Saraceni said.
Government agencies confirmed to move to the William Street site include the Department of Housing and Works and the Department of Planning and Infrastructure.
But CB Richard Ellis senior director of office services, Andrew Denny, said this was likely to have minimal impact on the office market due to all the other leases expiring.
“Underlying conditions in the market mean major new developments are needed in Perth – we are running out of space rapidly and there will be nothing left by March next year,” Mr Denny said.
A number of Australian institutions will be queuing up to buy 140 William Street, according to Mr Denny.
And with the State Government having close to 70,000sq m of office space expiring around 2007, there are still plenty of government tenants left in the market.
Colliers International associate director of research consultancy, David Cresp, said there was still significant demand for another tower, but that it would probably come on too late for many tenants in the market looking for space.
“Everyone around town with a development site is looking for a pre-commitment and there are several major tenants in the market,” Mr Cresp told WA Business News.
