NATIONAL law firm Corrs Chambers Westgarth is to follow resources giant Woodside into Perth’s newest premium building, Woodside Plaza at 240 St Georges Terrace.
Partners in the law firm voted last week to secure Level 15 in the soon-to-be completed building following negotiations with DB Real Estate on behalf of The Deutsche Office Trust.
The Woodside Plaza, which is due for completion this month, consists of low rise, midrise and high-rise office levels. Corrs Chambers Westgarth will take one floor of 2143sq m on a 10-year lease with options.
For the past 25 years the law firm has been located over three floors in the Commonwealth Bank Building, which is currently under contract for sale.
With its asking rent of $375 a square metre, Woodside Plaza tops the Perth CBD rental values. In comparison, the QV1 building has a rental value of around $350/sq m.
Corrs Chambers Westgarth partner and acting chief executive John Slattery said it was time for a change for the firm.
“Corrs in Perth has grown and the new premises will provide a modern interior and a quality working environment for our staff,” he said.
Despite the Corrs Chambers Westgarth decision, three of the floors remain to be leased in the Woodside Plaza.
Given the sluggish nature of the office leasing market, some industry pundits believe that space will take some time to be absorbed.
“You are looking at a limited market for tenants who want that amount of space and want to pay that amount of rent,” one industry source said.
And with Corrs Chambers Westgarth effectively out of the leasing market, Perth’s potential tenant hit list has been further reduced. In recent months 140 St Georges Terrace has successfully attracted a number of high-profile tenants to its building, including law firm Jackson McDonald, mineral sands company Illuka and banking group Rosthchild.
Major firms still scouting for space on the terrace include BHP Billiton, Worley, Westpac, and Deloitte Touche Tohmatsu, plus a number of government agencies.
WA Business News understands that Deacons has signed up a deal – which includes a new fit-out and additional space – to stay put in the BankWest Tower.
CB Richard Ellis leasing director Andrew Denny was up-beat about leasing market conditions in the CBD.
Mr Denny said there had been significant market activity in the second half of the year and that he expected this activity to grow, given the strength of the economy and outlook for the resources sector.
He expected more tenants to move into the CBD in the future to upgrade from suburban offices.
“CBD buildings offer more flexibility and more options,” Mr Denny told WA Business News.
Colliers International research manager David Cresp said recent leasing activity did not represent true net absorption.
“What is happening is simply a game of musical chairs, and musical chairs does not help the market,” he said.
“We are starting to see better quality space taken up with buildings like AMP and Woodside getting some leasing success, however until there is far stronger net absorption we will not see the market recover.”
CB Richard Ellis property analyst Andrew Woodley-Page said it might be some time before the Perth office leasing market experienced net space absorption.
Mr Woodley Page has forecast that, in the 2004 calendar year, there would be between 10,000sq m and 15,000sq m net absorption, driven by organic growth of existing tenants and the strengthening resources sector.
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