24/10/2006 - 22:00

Tenant mix may suit iconic tower

24/10/2006 - 22:00

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BankWest’s plan to move its head office out of the iconic St Georges Terrace tower, and the subsequent decision by the half-owners to sell their share, have fuelled speculation about the building’s future.

Tenant mix may suit iconic tower

BankWest’s plan to move its head office out of the iconic St Georges Terrace tower, and the subsequent decision by the half-owners to sell their share, have fuelled speculation about the building’s future.

With its lease set to expire in November 2009, BankWest was on the lookout to find suitable space for a growing CBD staff of 2,200. That search ended with last week’s announcement it had signed on to anchor the proposed 21-storey Raine Square office tower.

Soon after, Sydney-based property trust and funds manager, Valad, announced that its 50 per cent share of the BankWest tower was up for grabs, over which joint venture partner Multiplex has the first right of refusal.

The BankWest move closes the book on a lucrative lease over the entire 52-storey tower, comprising 39,240 square metres of space, of which 12,473sq m is sublet to a range of legal, government, financial and professional services firms.

Some property pundits predict the tower may struggle to attract another anchor tenant that would take up the naming and signage rights.

Swale Hynes Consulting director Digby Swale said the tower’s 857sq m floor plates tended not to suit larger tenants and would likely attract smaller users.

Mr Swale assisted BankWest select its new headquarters at Raine Square, which features floor plates measuring over 2,000sq m.

“The floor space was one of a number of major issues the bank was dealing with, as well as its ability to conduct business in a cost effective manner with staff housed in a number of buildings throughout the CBD,” Mr Swale said.

“The tower will tend to attract smaller users, because tenants needing 4,000sq m or more will look for a full floor instead. But this will really be decided by the marketplace, because bigger tenants may be forced to commit due to time constraints.”

CB Richard Ellis senior director office services Andrew Denny said it was still early days but large tenants would consider the tower a good opportunity, particularly because of its prominent signage.

“The space will probably be leased off in chunks but this will take a while,” he said.

Knight Frank national director office leasing, Greg McAlpine, predicted the tower would be leased on a floor-by-floor consideration, combining both large and small tenants.

He believed the disadvantage of small floor plates was offset by great views and opportunities for expansion.

But with the presence of at least four new major office projects planned or under way, all boasting larger floor plates and views to the Swan River, the competition to secure the commitment of large tenants, such as NAB, is fierce.

Mr Swale said that, while the additional new development in Perth was exciting, it was also not a healthy market to operate in.

“It’s a stifling market now when so many companies are procuring offices. Hopefully some normality will return in three years’ time and we’ll see vacancy rates return to between five and six per cent,” Mr Swale said.

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