If one building summarised the modern evolution of Perth’s business district, then 1 Adelaide Terrace, which sold last week for $87 million, could well be it.
If one building summarised the modern evolution of Perth’s business district, then 1 Adelaide Terrace, which sold last week for $87 million, could well be it.
Built in the late 1980s to house the Western Australian operations of energy producer Woodside Petroleum Ltd, the property was owned for many years by property trusts, which had it constantly and publicly valued.
As one property analyst told WA Business News, those valuations are like the growth rings in a tree, showing how the market waxed and waned during the past two decades.
But there is also the other part of history it reflects. The building was virtually the last major commercial construction east of Barrack Street, with its construction followed by a gradual westward shift of Perth’s central business district.
That shift has been led by the resources sector, most notably Woodside itself, which moved into its new building in 2005.
The site of the former Ozone Hotel, 1 Adelaide Terrace was developed by property group Armstrong Jones for its Western Growth Trust no 2 into an award-winning, purpose-built office block for Woodside, offering almost 20,000sq m of lettable space with a huge atrium to the western side.
According to Cityscope Publications, the land was acquired for $5.6 million and building cost $50.5 million.
It climbed in value to $72 million in March 1990 before the recession took hold, clawing back property values for years to come.
The Adelaide Terrace building’s records show this as its value fluctuated, falling to $55 million in August 1991, $48.8 in August 1995, rising back to $55 million the next year and then slumping to $47.5 million in December 1998.
ING Management took control of the building in March 2001 and it was valued at $45 million in December 2002, creeping up to $47 million in June 2005.
It was at this point that the history of construction in the context of the Perth property market really is something of marker.
Woodside had moved its headquarters to Perth in 1996 from Melbourne, but decided earlier this decade to bring its workforce under one roof.
Builder Baulderstone Hornibrook had won the $250 million deal to construct the new building on St Georges Terrace, agreeing to take responsibility for the remainder of Woodside’s original 20-year lease, which was due to expire next year.
At the time, the remnant lease was seen as something of a poisoned chalice but, as it turned out, the timing could not have been much better.
Prior to the shift, Perth’s leasing market was weak; Woodside’s move opened up a big block of space.
“We had never had 20,000sq m dumped onto the market in one go,” Knight Frank director office leasing, Greg Thurston, said. “As it turned out, it was a huge success.
“The timing was good and the market just started to kick.”
It’s difficult to believe how different the market was just three or so years ago.
At one stage, there was the possibility of the state government buying 1 Adelaide Terrace to house the WA Police Service. Following the failure of that deal, Baulderstone Hornibrook brought in leasing agents Knight Frank and Jones Lang LaSalle to find tenants.
The state’s Department of Industry and Resources was one to take the space in late 2004, as was telco B Digital, just as Woodside exited for the other end of the CBD.
