One-and-a-half years after being appointed as receiver of the $500 million Raine Square project, Mark Mentha reckons the proverbial sow’s ear is close to becoming a silk purse.
The Melbourne-based KordaMentha partner has seen a lot of the building project since his appointment, working three to four days a week from a project office on neighbouring Queen Street.
It has not just been Raine Square bringing him west; other appointments, notably the Griffin Energy administration, and an increasing amount of property and consulting work, has seen KordaMentha build a 45-strong Perth practice.
But for now, Mr Mentha’s principal focus is on filling Raine Square’s three-level retail precinct, at a time when consumer spending is weak and the supply of retail property in central Perth is on the rise.
The 13,000-square metre retail area is 80 per cent leased, though some areas that had been designated for retail are now being marketed as commercial space.
Mr Mentha is undaunted, even after the failure of the neighbouring one40william development as a retail centre.
Raine Square has been radically repositioned from original developer Luke Saraceni’s plan. Rather than build yet another premium centre chasing posh fashion labels, Mr Mentha has turned Raine Square into more of a suburban shopping centre in the city.
“The high-end strategy that was here originally, we’ve had to reorient to a neighbourhood, convenience strategy,” he told WA Business News.
“That’s why we’ve got the food, convenience and health offerings, across the three levels.”
The centre will feature a Coles supermarket and 60 speciality shops, including a gym, a dentist, a creche and fashion boutiques.
The 570-seat food court retains some of the marble finishes that were a legacy of the original plan but later finishes reflect the receivers’ budget.
Mr Mentha believes the retailers will have an immediate market, because the Raine Square tower is fully occupied with 4,000 workers from Bankwest, Squire Sanders and Atlas Iron.
In contrast, the shops at one40william opened before its office tower was filled and while road works continued on William Street.
Raine Square will also benefit from the $12 million tunnel under William Street, which links the shops to the underground train station, and the flyover to the Wellington Street bus station.
Mr Mentha is hoping these links will change pedestrian flows through that part of the city.
He reckons the 200-bay public car park will also be a drawcard, enabling inner-city residents to drive to the centre for their big weekly shop.
Reflecting on the task he faced at Raine Square, Mr Mentha said one of the main challenges was the eight-month shutdown after original builder Salta left the project, to be replaced by ProBuild.
“That was a challenge in itself because in building, momentum is everything,” he said.
Mr Mentha said the task was helped by the City of Perth, which did a “phenomenal job” facilitating planning changes, road closures, tunnel issues and so on.
“The City of Perth is a stand-out for convenience and being user friendly,” he said.
With Raine Square nearing completion, the focus will turn to marketing the centre for sale.
“The key to getting the best price is to mitigate all the risks, that’s why we’ve completed it, we’ve fully leased the tower, and we want a fully leased shopping centre,” Mr Mentha said.
Whether Mr Saraceni and his partner Houssean Pourzand get a payout will depend on another deal; the ability of Mr Mentha’s team to lease empty offices in the old Bankwest Tower, after Mr Saraceni agreed to cover Bankwest’s head lease until November 2014.
Mr Mentha said a lot of space had been taken on short-term leases by engineering and mining project teams but about 10 floors remained to be filled.
