The City of Perth’s dream of a large public square in place of the 1970s era Law Chambers and Public Trustee buildings on Hay Street could be a very expensive exercise for the state government if it chooses to acquire the properties.
Aside from compensating owners The Perth Diocesan Trustees and the Public Trustee if the two adjoining buildings were demolished, a total of 16 tenants would need to be relocated during what is Perth’s tightest office market in more than twenty years.
The government is understood to have received a valuation report for the properties late last week and is still considering its next move.
The 13-storey Law Chambers building is currently home to 12 tenants including Nova Newsagency and Golden Swan River Gifts & Souvenirs at groundfloor and HIS Westralia, IAE Education Net, Friedman Lurie Singh & De’Angelo and the Department of Culture and the Arts on its upper levels.
Next door at the 12-storey Public Trustee’s office, the Public Trustee, Cravens Pharmacy, Opal Strike and the WA Police occupy the building in its entirety.
Colliers International director of office leasing Ian Campbell said if the government decided to level the site, it would have a tough time finding office space elsewhere for tenants in the current market.
“Good luck relocating all those tenants. If they do move, they’ll be hit up for double what they’re paying now in rent,” he said.
Mr Campbell said tenants may not be the only ones out of pocket, as building owners who had cancelled leases in the past had often been forced to compensate affected tenants.
The government launched an Expression of Interest campaign last month to generate ideas for the redevelopment of the Old Treasury Buildings.
High on its wish list for the site is a 5-Star Hotel, an office building and minor retail space.
City of Perth consultant to the project, Ken Adam, said the Law Chambers underground car park would be vital to any potential hotel or office block in the precinct and may need to be increased in size to cope with demand.
Mr Adam revealed the Cathedral Square project could become the subject of a national design competition.
Department of Housing and Works director general Bob Mitchell told WA Business News last week it had not yet decided whether to make any financial contribution to the project and would examine the issue as part of the EOI process.
An industry briefing for all interested development proponents will be held on July 11 2007, with the EOI period closing on August 23.
