THE recent release of a prospectus for the Raine Square Property Trust draws the Raine Square retail precinct one step closer to becoming transformed into inner-city markets.
THE recent release of a prospectus for the Raine Square Property Trust draws the Raine Square retail precinct one step closer to becoming transformed into inner-city markets.
The prospectus, developed by Raine Square Management, comprising Perth businessmen Neil McKinnon, Craig Hughes and George Patterson, aims to raise at least $7.5 million by October 10 in order to settle the $25.7 million purchase price with current owners, Brockwell Hospitality Investments/Western Plaza Corporation.
The development group is banking on the future development of the proposed William Street rail station and the transformation of the 13 hectares of railway land between the city and Northbridge into a major cultural precinct to greatly enhance the property’s value by the time the trust expires in 2010.
Contrary to previous speculation the project does not involve the development of a six-star hotel and will only require the approval of authorities such as the City of Perth and the Department of Health to approve the construction of a total of 195 market stalls.
The markets are to be styled on the successful Melbourne, Sydney and Adelaide markets and will trade seven days a week.
Mr McKinnon said given that the minimum subscription was raised, construction work would commence soon after October 10 with the aim of having the markets open by Christmas.
The release of the prospectus comes as a rude shock to some Raine Square tenants who only learnt, on acquiring the prospectus by chance, that their leases would not be renewed after settlement.
Under the prospectus plans around seven tenancies will be terminated, with the Hobnob Bridal store to remain as the only existing retail tenancy on the interior of Raine Square.
The news comes after a history of tenant dissatisfaction with management of the property under its current owners and WA Business News understands that a number of disgruntled tenants are currently seeking legal advice.
Hobnob Bridal proprietor Brian Davies said Raine Square tenants had been treated badly and kept in the dark throughout the whole process.
He said his lease contained contractual arrangements that required the Raine Square owners to give 12 months notice of any development occurring on the property. Mr Davies said he had attempted to contact the Raine Square development group numerous times but was yet to receive any response.
“The retail tenant is the cannon fodder of landlords and agents,” he said.
Mr McKinnon said the group would look after tenants under existing agreements as was their commercial responsibility as new owners, however, the group was yet to take ownership of the property and was not legally required to renew leases once expired.
He said that as each interior retail tenancy lease expired the project’s managing arm Raine Square Developments would develop the vacant tenancy into market stalls.
“About 100 stalls can be constructed already without disrupting any of the tenants,” Mr McKinnon said. “The markets will grow as existing tenants disappear.”
Mr McKinnon said the property had become run down and that existing tenancy rents had to be brought into line with the market levels.
Current owners, the Brockwell/ Western Plaza group intend to lease back the Royal Hotel, the Wentworth Hotel and the Moon-’n’Sixpence, and have indicated it will take its lease out to 2009.
The other major tenant will be Raine Square Developments, which will manage the markets and pay an annual rent of nearly $2 million, rising annually by 4 per cent after June 2005.
