Pivot plans for CBD retail

Peter Laurance’s Pivot Group is gearing up to begin a $140 million, three-level retail development at 100 St Georges Terrace, creating a significant new retail precinct in the CBD.

The Pivot Group took a $30 million option over the property in 2003, which was exercised in December last year with Pivot’s joint venture partner, Industry Superannuation Property Trust Pty Ltd (ISPT), becoming the owner.

Industry sources say tenants are being secured for the approximately 15,000 square metres of retail space, with construction anticipated to begin late this year, with a second stage of development including an office tower.

It has taken Perth’s leasing market until now to recover from the deluge of office space that hit the market in the 1990s following several speculative developments, and developers are reluctant to make the same mistake again 

With developers vying to secure office tenants for new developments, sites with a significant portion of retail space have the advantage of being able to build and tenant the retail space, and then later the office space, taking some of the risk out of development.

The Pivot Group has secured a lease with Woolworths for 2,500sq m over a 20-year period in the retail complex, to be known as Century City. This gives Pivot an advantage over Multiplex and Ric Stowe’s Westralia Square site, which is proposed to also include a significant retail area but has yet to secure an anchor tenant.

Lease Equity director Jim Tsagalis said the site was in an ideal location, and if the development proceeded it would add connectivity between the office, retail and train precinct.

“Retail is thriving in the CBD right now, and with a lot of owners looking to upgrade their space and the upgrading of the malls, things are looking really good,” he said.

“It is the opportune time to spend money and further promote and position CBD retail, given the outcome of the [retail trading hours] referendum.”

Mr Tsagalis said the retail dynamic of the city would change with the new train station, and that Pivot’s development site was located in one of the main new routes for pedestrian traffic.

Pivot’s plans show intentions for a $140 million development including a 17-storey building fronting St Georges Terrace, and the four-storey Century City retail building with three levels of shops and a sky lobby with restaurant to Hay Street.

In exchange for a 20 per cent floor concession and extra parking bays, the Pivot Group will provide a pedestrian arcade to link through to St Georges Terrace, as well as $50,000 for public artworks and heritage conservation.

As part of the retail development, foundations will be laid for an 18-storey office tower with an end value of $125 million, which will be developed if a tenant can be secured.

An industry analyst said that ISPT’s development of the site was indicative of the shortage of commercial assets available in Perth.

“ISPT typically doesn’t develop assets, but the market is so tight right now that they are doing it,” the analyst said.

“Finding pre-commitment for office sites is problematic, and developers are very reluctant to speculatively build, so having retail as part of an office development is a very good thing."