Subiaco is set for resurgence, but it will take a coordinated approach from landlords, developers and council to take full advantage of its more than $500 million pipeline.
Subiaco has a history of reinvention, and expectations are building that a pipeline of new developments will drive the renewal missing in the city in recent years.
Struggling through a bit of a funk of late, Subiaco has suffered from an identity crisis since the loss of some top attractions.
The crisis started well before the final siren sounded at Western Australia’s long-time home of football, which shifted to the Burswood Peninsula in 2018.
That followed the closure of one of Rokeby Road’s iconic hospitality venues, the Witch’s Cauldron, and the departure of several other businesses, including the cinema, which collectively sparked a sharp rise in vacancies.
Even earlier was the shuttering of the Subiaco Pavilion Markets, which had been a cultural and community hub for nearly 30 years until 2008.
But a series of developments has the potential to start a new chapter for Subiaco.
Opportunity
With a combined value of more than $500 million, the projects feature a mix of residential and commercial.
One of the largest developments under way is Blackburne’s $280 million ONE Subiaco project.
Multiplex formlerly broke ground on the project, located on the former Pavilion Markets site, last week, putting an end to its decade-long dormancy.
The apartment development is spread across three buildings, the tallest reaching 24 storeys, with the ground floors to house a reimagined marketplace, including shops, cafes, bars and restaurants.
Blackburne managing director Paul Blackburne purchased the 5,451 square metre site for $25 million in 2018.
“The lack of action on the site was a major factor in the decline of Subi as Perth’s number one entertainment destination,” Mr Blackburne told Business News.
“The area has had a tough run for a few years and, without doubt, it will emerge again as a leading place to visit and live.”
Mr Blackburne said his team had already sold more than 80 per cent of the 245 apartments.
“I think those in power now have seen what happens when fear of change dominates,” he said.
“Subi has a bright future. Its unique village feel and prime location makes it hard to beat.”
While Subiaco may have lost a few of its notable drawcards, the Regal Theatre has been a saving grace.
Regal Theatre general manager Kim Knight spent most of her childhood in Subiaco, watching her parents transition the heritage building from a cinema to a performance venue.
“Subi has gone through some changes. The Regal has been the one consistent,” Ms Knight said.
“When we are busy, Subi is busy; it’s such an integral part of the economy here.
“We’re in a kind of a niche market.
You can never replace a live performance, I think people will always want to have that experience.”
She said the Regal had been closed since March, unable to open at 50 per cent capacity under the current COVID-19 restrictions.
In the meantime, Ms Knight has been collaborating on the launch of ‘Streets of Subi’, a new online directory for events and businesses.
“Not only do we suffer ... all these businesses around me are suffering,” she said.
“We’ve got a lot going for us, look at all the development popping up.
“And hopefully, once COVID is gone, if it goes, we can get back to being a thriving inner-city suburb. But to do that you’ve got to make yourself appealing.”
Kim Knight says The Regal Theatre is one of the few historic Subiaco attractions still in business. Photo: Gabriel Oliveira
New plan
Urbanista Town Planning director Petar Mrdja is quick to point out what he considers are two of Subiaco’s major turn-offs in recent years: parking and poor planning policies.
“Subiaco used to be a vibrant town centre and tourist destination,” Mr Mrdja said.
“Unfortunately, Subiaco has suffered a steady decline for more than a decade now, for a number of different reasons, including a lack of vibrancy through lost tenants and high rents, [and] a backwards council with outdated and restrictive planning policies that have stifled development.
“Business owners simply took their ideas to other areas and the people followed. While other town centres such as Mount Lawley, Leederville and Claremont have thrived, Subiaco has stagnated and suffered as a result.”
That stagnation could soon end, however, with a refreshed local planning scheme (which hadn’t been updated in 20 years) approved in December 2019.
That move has prompted significant developer interest, with Mr Mrdja currently advising on two major projects set to be announced in coming months.
Those projects and several more, he said, would help bring about revival.
“These developments will more than make up for the loss of Subiaco Oval and provide an opportunity to inject some diversity and activity back into the town centre,” he said.
City of Subiaco Mayor Penny Taylor was also hopeful the new planning scheme would create opportunities for widespread revival in the area.
“Change is inevitable,” Ms Taylor said.
“It’s only when councils and mayors work hard in engaging with state government that we have a chance of getting what residents want.”
She said although there had been some community consternation over density, the city was successful in getting about 95 per cent of what it asked for, which included protecting the character of the neighbourhood, with most of that density focused around activity centres, key transport corridors and the DevelopmentWA-led Subi East project.
The new Forrestfield Airport Link, which could connect Subiaco with an additional 20,000 passengers per day, presented another opportunity for resurgence, Ms Taylor said.
“Vibrancy is all about people,” she said.
“Why would anyone want an empty or derelict building in their area?
“I am hoping we can bring a sense of certainty, because certainty breeds confidence.”
Ms Taylor said part of that involved continuing to support the community; this included the city’s 2020-21 budget planning to offset rates with a $2 million contribution from reserves, as well as fast-tracking more than $2.5 million in capital works projects.
There have been a couple of recent setbacks in terms of building Subiaco’s commercial population.
Mineral Resources had planned to shift its headquarters to SubiXO on Hay Street, but instead purchased a property in Herdsman.
Park Regis was also due to hang its shingle at SubiXO, but pulled out of operating the 168-room hotel portion prior to the development’s completion.
While this had been disappointing, Ms Taylor said SubiXO’s vacancies could be viewed as additional opportunities for Subiaco.
“If anyone is out there with 500 people that they want to bring into Subi, we’re ready for you,” she said.
“In a world facing an unprecedented crisis, look out the window; three kilometres from the CBD, four train stations, tree-lined streets, historical houses, inner-city apartments, beautiful parklands, where would you rather be?”
Reset
It’s no secret Subiaco has been plagued by for-lease signs in recent years, with vacancies increasing almost threefold between 2017 and 2018 (from 5.94 per cent to 15.19 per cent, before easing slightly to 14.74 per cent in 2019).
While the latest figures are yet to be compiled, Ray White Commercial property adviser Brett Wilkins is confident vacancies have improved significantly.
That confidence is backed by several large leasing transactions in recent months, including Dilly Dally’s move into the Witch’s Cauldron space, and Chemist Warehouse taking up about 400 square metres of the former Esprit tenancy.
Mr Wilkins said lengthy road, gas and NBN works that had negatively impacted the strip in recent years were now over, with the previously attainable $600 per net square metre another barrier.
“There’s a cycle with retail strips,” he said.
“They start off boutique with low rents, become successful and rents rise; all of a sudden those trendy shops can’t survive, so they move out and the big national franchises move in.
“The rents have to collapse low enough so that independent retailers move back in again.”
LJ Hooker Commercial Perth director Brian Neo said landlords needed to work more closely with tenants to achieve a win-win scenario.
“The days of squeezing all the juice out of the lemon are over, and as soon as retail property owners understand this, we believe you will see a fundamental change to streetscape,” Mr Neo told Business News.
“We don’t see this as a problem for Subiaco but a problem for Perth retail in its entirety.”
Mr Neo said Subiaco’s train station, easy-to-access arterial roads, and proximity to the Perth CBD made it an attractive commercial hub.
He said investors had taken notice, pointing to two significant transactions this financial year: Realside Financial Group’s $38 million acquisition of 388 Hay Street, and the $15.5 million sale of the former Coles site on Barker Road.
“A CBD-based business could potentially halve their rental costs by moving to a brand new building in Subiaco, which in the current environment would seem very attractive,” Mr Neo said.
“Subiaco has seen almost more commercial investment recently than the Perth CBD.
“There is a shortage of available land for sale, and with the pending release of DevelopmentWA’s Subi East project, [there] will only be further investment into the suburb.”
As a vote of confidence, Mr Neo’s agency shifted its head office from West Perth to 388 Hay Street earlier this year.
That property was originally designed as a shopping centre, but owner Realside Financial Group is focused on repositioning it into a commercial precinct to take advantage of its large floor plates and 300-bay car park.
Realside principal Mark Vonic said COVID-19 had strengthened the firm’s commitment to its strategy, with the potential to prompt a resurgence of the suburban office market.
“It’s really important these precincts get a bit of love in terms of acknowledging the good as opposed to focusing on the bad, because fundamentally there are a lot of positives about Subiaco,” he said.
“And when you benchmark against any other area in the metropolitan area, it all stacks up.”
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Shift
Edge Visionary Living managing director Gavin Hawkins said the relatively recent emphasis on high-density living, facilitated through planning frameworks and reforms, had created a much-needed shift towards more sustainable accommodation and lifestyle options, providing a boost to the city’s resident numbers.
The organisation completed its Botanical Apartments on Price Street last year, and Mr Hawkins said more than 60 per cent of its residents had previously lived within three kilometres of the development.
“I’m sure many of these residents were skeptical about apartment living not so long ago, and perhaps even opposed,” he said.
“We are now seeing broad-based acceptance from a range of buyers who view apartment living as a smart and attractive lifestyle choice.
“The opportunity is for the development industry to continue to be involved in providing smart, well-designed and affordable multi-residential living options in Subiaco.”
Cedar Woods Properties is another developer hoping to tap in to Subiaco’s potential.
Managing director Nathan Blackburne said Subiaco had been a logical target for the group’s first WA-based medium-density infill project, featuring a mix of townhouses and low-rise dwellings. Cedar Woods purchased the former 1.5-hectare TAFE site on Salvado Road last year, with plans to launch the development in coming weeks.
“Subiaco is a well-respected and established suburb that lots of buyers have aspirations to live in,” Mr Blackburne told Business News.
“Since the downturn … it has remained a popular suburb where property values have held up relatively well.”
Mr Blackburne said development approval was imminent and registrations of interest so far had largely been characterised by downsizers, as well as young professionals and couples who couldn’t afford the $1.2 million median buy-in price.
“There is a great opportunity to build upon brand Subiaco, and that starts with building the population,” he said.
“That is the start of the resurgence of Subiaco because it’s that diversity in population that creates the vibrancy and the demand for retail activity.”
Subiaco will receive a further boost to its population once the state government-led Subi East project comes to fruition.
Subi East involves the redevelopment of 35ha of land in and around Subiaco Oval and the former Princess Margaret Hospital site into a new precinct expected to deliver more than 2,000 dwellings for 4,000 new residents.
The draft Subi East Master Plan, led by architecture practice Hames Sharley, was released for public comment in July and has been more than two years in the making.
Hames Sharley associate director Shannon O'Shea said COVID had reinforced design ideas and concepts of creating walkable neighbourhoods.
"Living under Covid-19 restrictions for the past several months has brought sharply into focus the need to develop places that people want to be in and places that can enrich lives. This requires a very holistic and ‘smart’ approach with the human experience at its core," Ms O'Shea said.
"This supports the concept of the 20-minute neighbourhood based on the idea that people can access daily goods and services—shopping, education, business services, employment, community facilities—from within 20 minutes of their home, whether it be by walking, cycling or a safe public transport option."
Planning Minister Rita Saffioti said the government had been engaging with community, local businesses and developers since the announcement of the project, and was aiming for the final master plan to be approved by the end of the year.
“The need for a substantial development in Subiaco to breathe new life into the area has been on the state and local government radar for some time,” Ms Saffioti told Business News.
“By focussing density on these areas, it helps to alleviate pressure from other potential places in Subiaco.
“We anticipate strong interest from both WA and national developers when we go out to market, likely 2021.”
Beyond Subi East, additional development opportunities include a 6,499sqm parcel of land on Wunderlich Road, which is being sold through CBRE with a current development application for 201 apartments and 11 offices.
Expressions of interest for that site closed last month, but CBRE said it could not yet comment on its status.
CBRE is also brokering the sale of The Vic Hotel on Hay Street.
CBRE hotels director Ryan McGinnity said the property had so far drawn interest from publicans, brewers and developers looking to take advantage of the site’s 2,000sqm land parcel, 54 onsite parking bays, and long-term development potential.
