05/07/2013 - 10:39

QUBE joins city office build

05/07/2013 - 10:39

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QUBE joins city office build
NEW BUILD: Construction at 999 Hay Street will start next month as developer QUBE locks-in tenants. Photo: Bohdan Warchomij

Construction of QUBE’s office tower at 999 Hay Street is expected to start in August, amid expectations the developer will soon ink a leasing deal for the west end project.

It’s understood international engineering, architectural and environmental services group GHD is in negotiations to relocate its business from Adelaide Terrace to QUBE’s eight-level project on the western fringe of the city.

Both GHD and global engineering and construction group KBR are believed to have run the ruler over the 10,800sqm office project, but QUBE managing director Mark Hector was tight-lipped about negotiations.

However Mr Hector did reveal the piling work on the site is scheduled to commence next month, suggesting QUBE is close to announcing an anchor tenant for the project.

It has been an extraordinary six months for the city’s pre-leasing market, with tenants signing up to six significant new office towers in the CBD, including the second tower at Brookfield Place and four towers at Leighton’s Kings Square precinct.

That sparked a mini office construction boom, and leasing analysts believe there could be more to come in the second half of the year, albeit at a much slower pace.

The key driver for tenants was the potential savings a more modern, efficient office space could deliver, according to CBRE senior managing director office services Andrew Denny.

“If you can save 10 per cent on your floor usage, that translates straight through to your bottom line,” Mr Denny said.

“All of these businesses work on workspace ratios … because that all gets costed out and goes through on their billing system, and with staff attraction and retention, even in a softer labour market it’s still a big issue long term.”

CBRE has now focused its marketing campaign on the high-rise component of the second tower at Brookfield Place, after Deloitte and Corrs Chambers Westgarth signed lease agreements for accommodation in the lower levels of the building.

There’s only a small pool of tenants who would be willing to pay the price for the top floors of Brookfield II, especially after Shell demonstrated there was more to Perth than a St Georges Terrace address and signed up to a lease at Kings Square in the City Link project.

Shell’s decision caught many property analysts and developer by surprise, but has bolstered the outlook for a number of office proposals still seeking an anchor tenant, including Georgiou Capital’s Milligan Square office tower, the redevelopment of the Old Melbourne Hotel site, and the office tower planned for the former Emu Brewery site.

There remains a number of city tenants with the scale to underpin a new development, including WorleyParsons, Ernst & Young, US energy giant Chevron and Santos.

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