The West Perth office market may be effectively full, but a series of small developments in the area, and at the west end of the city, will help to ease supply in the next year.
The West Perth office market may be effectively full, but a series of small developments in the area, and at the west end of the city, will help to ease supply in the next year.
Diploma Group Ltd is progressing with its mixed-use development at the former CWA House at 1174 Hay Street, which will create 4,500 square metres of commercial space.
The project will contain six floors, including three floors of office space with a floor print of about 1,400sqm.
A retail tenancy of 320sqm has been created on the ground floor, with 24 apartments to be built on floors four to six.
The project is scheduled for completion at the end of next year, although Diploma has not said whether the building would be retained or sold.
In its prospectus, the company indicated it would generate $70 million in revenue from the project.
At 914 Hay Street, a refurbishment of the Mortlock Building is due to start, which will create 700sqm of office space upstairs.
Built in 1920, the building is currently home to music retailer 78 Records, with the store moving to the back of the ground floor to allow for the creation of two new retail tenancies in the front.
The refit will include a new lift, repairs to the heritage façade and restoration of some windows.
Nearby, at 503 Murray Street, a new office building containing 7,000sqm of space is under construction.
Knight Frank director office leasing Greg Thurston said 4,000sqm had already been leased, with the project due for completion early next year.
A further 4,800sqm of space will come onto the market next year at 432 Murray Street, when construction of a seven-storey office building is completed by Firststate Developments WA.
Several development applications for new office stock have also been lodged with the City of Perth, including a proposed eight-storey building near Jacob’s ladder in West Perth and plans for an office building on part of the Melbourne Hotel site.
According to the Property Council of WA, 60 per cent of the 16,380sqm of office space due in West Perth next year has already been pre-committed.
About 4,950sqm of space will come on to the market in 2008.
Savills director commercial leasing Graham Postma said a lack of large development sites had compounded the effect of high demand in West Perth.
“I think if a developer were to build a 5,000 to 10,000sqm project, the market would look at that very favourably,” he said.
“If you look at Wellington Central, that was fully committed shortly after coming on to the market, and I think you’d have a similar outcome if another site became available.”
Mr Postma said large projects were pre-committed and back-fill opportunities were being met immediately.
“Smaller developments and refurbishments will be done in a more timely fashion, but it won’t be enough to satisfy demand,” he said.
