Developer Luke Saraceni is preparing to lodge a development approval for Raine Square, the latest addition in the race to get a new office building out of the ground in the CBD.
Developer Luke Saraceni is preparing to lodge a development approval for Raine Square, the latest addition in the race to get a new office building out of the ground in the CBD.
Mr Saraceni, who bought the site for $21.5 million last year with partner Hossean Pourzand, told WA Business News architect Edwin Bollig of Bollig Design Group had designed a building for the site and that a development approval for a nine-storey, 30,000 square metre building would be lodged soon.
“We will have floor plates of 5,000 square meters, which will provide an efficiency for users, and with that comes lower occupancy costs,” Mr Saraceni said.
“We will be able to ask for rents $100 a square metre cheaper than are being asked for 125 St Georges Terrace.”
He said the building would have a four-and-a-half green star rating, and due to the large floor plates would be perfect for government or resource tenants.
Mr Bollig said the new contemporary building would be fully integrated with the existing heritage hotels on the site and would provide a contrast between old and new.
Mr Bollig’s recent work includes the SGIO and Conoco Philips buildings in West Perth, the Aspects retail outlet in King’s Park, and the current Plaza Arcade refurbishment.
There has been speculation in the leasing market recently over proposals for several new buildings, decreasing vacancy rates and the large amount of tenancies that are expiring in the next two years.
While Multiplex filed a development application for 125 St Georges Terrace last month, industry analysts are sceptical that the developers will secure anchor tenants at rents well above market levels.
But, in a tightening leasing market, tenants are also being warned to secure new leases early in order to ensure space and avoid rising rents.
NSC Corporate joint managing director Steve Carulli said there was enough leasing stock in the market for the next 12 months, but that tenants needed to be proactive to ensure they secured sufficient space to cater for their needs.
“Developers are going to struggle to get $400 a square meter to anchor new buildings, the market just isn’t there,” he said.
“Margins are tighter than ever and tenants want efficiency rather than excess and ivory towers.
“Perth went through the same stage in the cycle 15 years ago, and what resulted was smaller fringe CBD development, which is less dependant on big re-commitments and easier to get out of the ground.”
Colliers International director Ian Campbell said that any office development would be tenant, and not supply, led.
“What some tenants may be forgetting is that any development takes two and a half to three years to complete, and if space is becoming tight now then tenants could be forced to pay higher rent in lesser buildings,” Mr Campbell said.
“A lot of companies and government departments will have to make decisions in the next 12 to 18 months about where they want to be, and if they don’t have their heads around where they want to be they may miss out.
“It’s a very exciting time in Perth – the last time industry talked about developing was the late 1980s, and at that time rents doubled over 18 months.
“That won’t necessarily happen now, but there will be significant rental growth over the next two years.”
