Herdsman Business Park has emerged as the big winner in a state government shakeup of office leasing commitments.
Herdsman Business Park has emerged as the big winner in a state government shakeup of office leasing commitments.
The Minister assisting the treasurer, Bill Marmion, announced yesterday two divisions within the Department of Treasury and Finance, government procurement and building management and works, will relocate to the Optima Centre, in Herdsman Business Park by early 2011.
The new Department of Training and Workforce Development will also shift its head office from East Perth to the Optima Centre.
Optima Centre developers ABN Group and Macquarie Real Estate Capital said the government had signed a 15-year lease for over 13,000 square meters of new office accommodation in the 4 star green star rated Optima Centre building B.
The agreement is the largest leasing deal for a new suburban office development in almost two decades.
ABN Group general manager of developments Jason Willoughby said the state government's decision to relocate to a suburban office building was in keeping with a national trend.
"The city is suitable for many businesses, however the successful leasing of the last wave of new suburban buildings reinforces the desire of many large tenants to occupy a CBD-quality building in the suburbs with good access to public transport," Mr Willoughby said.
"The new generation Optima Centre - with its ideal location outside the CBD and high environmental credentials - has enabled the state government to lock in long-term occupancy savings."
Mr Marmion said in a statement released yesterday the new 'master planning' approach to state government office accommodation would save between $20 million and $25 million each year.
The full announcements are below:
Minister's announcement:
Government targets savings in office accommodation costs
Minister Assisting the Treasurer Bill Marmion has announced a new 'master planning' approach to the planning and procurement of future State Government office space, with the potential to save between $20million-$25million a year by 2015.
Mr Marmion said more than $220million per year was currently spent on leasing and managing office accommodation for General Government Sector agencies.
"There are opportunities for significant savings, as well as improvements to the efficiency and effectiveness of work environments, by addressing what has been a piece-meal approach to leasing and fit-out," he said.
"State Government agencies occupy about 360,000sqm in the Perth central business district, East Perth and West Perth, spread across 148 separate lease agreements, and 96 buildings, and many agencies have staff spread across a number of buildings.
"A new approach to office accommodation is needed to achieve savings."
The Minister, whose responsibilities include Government building management and works, said savings would be driven by:
- consolidating accommodation into less buildings and taking better advantage of Government's considerable buying power in negotiating leases
- decentralising about 15 to 20 per cent of office accommodation - 60,000 to 80,000 square metres - from more expensive Perth CBD leases into metropolitan centres
- reducing the space that is leased per person by standardising office fit-outs from the current 19sqm to about 15sqm per person, and sharing facilities, such as reception and meeting rooms, for all the agencies in major office buildings (saving about 20 per cent).
"This new master planning approach to State Government office accommodation will save the Government between $20million and $25million per annum, when implemented over the next five years," Mr Marmion said.
The Minister said a number of immediate actions were proposed.
"Firstly, the State Government will commence the consolidation into fewer buildings by leasing the entire office space available in the 19-storey tower under construction at 140 William Street, Perth," he said.
"The Government has already pre-committed to lease 23,000sqm of office accommodation in this new five-star Green-Star rated office building, and it is now proposed to lease the remaining 14,600sqm of available office space in the tower and the adjacent heritage buildings.
"When fully occupied, 140 William Street will accommodate approximately 2,500 Government officers from about 10 agencies. Under the previous approach to fit-out, the building would have accommodated less than 2,000 employees.
"Secondly, the Department of Treasury and Finance (DTF) will lead decentralisation by example and relocate two of its divisions - Government Procurement; and Building Management and Works - to a new 13,200sqm office building, the Optima Centre, in Herdsman Business Park by early 2011.
"These DTF divisions are currently spread across five different buildings in the Perth CBD, West Perth and East Perth.
"The new Department of Training and Workforce Development will also relocate from East Perth, relocating 880 public servants to the Optima Centre."
Mr Marmion said long term trends in lease rates showed CBD rates were typically 30 per cent higher than those in the Perth metropolitan area.
"On that basis, only those agencies with demonstrable need to be in the Perth CBD should remain there," he said.
The Minister said the plan would also involve major Government office buildings being established at several other suburban activity centres over the next five years.
"Choosing locations close to a major rail route and the freeway, and ease of access to and from the Perth CBD, make suburban activity centres an attractive location for Government office accommodation hubs," he said.
"Apart from the direct savings in Government's office accommodation costs, this decentralisation will provide a valuable economic stimulus to the development of regional centres in the Perth metropolitan area.
"It will also have additional benefits to the transport system, as well as improve community access to Government agencies."
Mr Marmion said the lease for the Governor Stirling Tower at 197 St George's Terrace expired in mid-2012, and the additional space at 140 William Street, plus the space at the Optima centre would replace this - at much cheaper rates than the alternative of a new lease in St Georges Terrace.
"To give an indication of what we've been able to negotiate, an earlier - aborted - procurement process for replacing the current lease in Governor Stirling Tower with a new lease in St Georges Terrace would have resulted in a cost of about $780 per square metre, whereas the new leases will average about $520 per square metre," he said.
"As part of the master plan, two major Government-owned buildings - Dumas House in West Perth and Albert Facey House in Forrest Place - will be retained and refitted."
ABN Group announcement:
State Government commits to Optima Centre in major leasing deal
The Western Australian State Government has signed a 15-year lease for over 13,000sqm of new office accommodation in the 4 Star Green Star rated Optima Centre Building B, located at 16 Parkland Road within Herdsman Business Park.
The agreement is the largest leasing deal for a new suburban office development in almost two decades.
The seven storey building, which is due for practical completion next month, is the largest new office development outside the Perth CBD in the past 20 years.
The Optima Centre was developed by the ABN Group and Macquarie Real Estate Capital and is set to be handed over to the State Government mid-year.
It will accommodate the Government Procurement and Building Management and Works business units from the Department of Treasury and Finance and the head office of the Department of Training and Workforce Development.
Jason Willoughby, General Manager of Developments at the ABN Group, says the State Government's decision to lease accommodation at the Optima Centre and the recent relocation from the city of many national firms to new suburban buildings is in keeping with the national trend over the past 10 years.
"The city is suitable for many businesses, however, the successful leasing of the last wave of new suburban buildings reinforces the desire of many large tenants to occupy a CBD-quality building in the suburbs with good access to public transport," said Mr Willoughby.
"The new generation Optima Centre - with its ideal location outside the CBD and high environmental credentials - has enabled the State Government to lock in long-term occupancy savings," said Mr Willoughby.
"The Government lease will also be a great catalyst for similar projects to get underway within the Herdsman Business Park and fits within our Committee's vision for the area's future," said Mr Willoughby, who is also a member of the Herdsman Business Park Committee which recently released plans to improve the precinct.
"After all, Herdsman Business Park is the only real business park in Western Australia," concluded Mr Willoughby.
Tim Jones from Macquarie Real Estate Capital says the main objective for the Optima Centre was to construct office space to the highest standards as well as deliver an environmentally-focused design.
"The announcement of the State Government committing to a lease of significant length confirms our original vision for the development.
"The entire Optima Complex has been designed to tick all the green boxes required by large corporates and State Government departments, including reducing expenses and providing a cost-effective, long-term solution for a large area of office accommodation," said Mr Jones.
"We're confident the Optima Centre sets a new benchmark in Western Australia for future office developments specifically in the area of sustainability," he continued.
"It will no doubt become a flagship green building for Western Australia as it successfully combines quality leading-edge office accommodation with both energy efficiency and sustainable design elements.
"I understand the Green Building Council's certified rating of 4 Star Green Star coupled with the easy access to public transport were both major factors in the State Government's decision to commit to Building B of the Optima Centre," concluded Mr Jones.
Built by PACT Construction, the Optima Centre - located on the corner of Parkland and Hasler Roads in Herdsman Business Park - combines two separate buildings. Building A is completed and is home to Canon Australia and the ABN Group. Optima will eventually be home to over 1,300 employees.
Through an initiative established by the developers, Optima is serviced by a door-to-door Transperth high frequency bus service through Herdsman Business Park from Glendalough train station, which operates every 10 minutes in peak hour.
The developer was represented in the lease negotiation by Digby Sutherland, Director of Project Leasing at Sheffield Capital. Mr Sutherland said the prestigious new office complex was poised to become a signature development in the Herdsman Business Park and would provide a benchmark for future suburban office development in Perth.
"The Optima Centre design was developed after taking into consideration the successful building features identified in new A grade suburban office developments around Australia." said Mr Sutherland.
"We also met with many national tenants and Perth's larger businesses to make sure we were constructing a building that incorporated features that were important to their business. These included efficient 2,500sqm floor plates, backup generators, fully secured bike storage facilities and high quality change room facilities.
"It is great to see the foresight of the developers has proven to be such a success and has also provided the state with quality offices with long-term occupancy savings," concluded Mr Sutherland.
