This article is from the Australian Property Journal archive
AMERICAN oil and gas giant Chevron and Canadian-backed Brookfield has signed a deal to develop a new $360 million office tower at Perth’s Elizabeth Quay.
The partnership comes after hot on the heels of the Metropolitan Redevelopment Authority granting Chevron Australia development approval for the site in December last year.
This comes after Chevron requested to delay the development four years ago due to the slowdown post the mining boom.
Brookfield managing partner Sophie Fallman said the development was a vote of confidence in the Perth office market.
“For a while we have seen a lot of signs of confidence and growth,” she said. “We see this as a great demonstration of the ongoing growth of the office market.”
Brookfield will buy the site and development from Chevron and the oil and gas giant will be the anchor tenant, committing to lease approximately 78% of the 29-storey 54,000 sqm office tower, for a 15-year period. Construction is expected to commence in mid-2020.
Perth is attracting investors’ attention, particular as the yield spread between Sydney and Perth has reached historical high, widening by 170 basis points, according to Savills.
Savills Western Australian director for capital transactions Nick Charlton said global investors are looking closely at counter-cyclical investment opportunities in the Perth CBD.
“Investors are confident the spreads are too wide and set to narrow in the short to medium term,” he said. “Interest in the CBD office market has been further heightened by the prospect of net effective rental growth in prime office buildings forecast to be at 9.0% per annum between now and 2021, with the lack of new stock and tightening vacancy rates, which are now at sub-5.0%.”
Meanwhile Premier Mark McGowan welcomed the partnership between the North American companies, adding that the development will create 1,000 jobs during construction.
Located on the corner of The Esplanade and Barrack Street, the building’s lower levels will include childcare and gymnasium space with retail tenancies and café/restaurants on the ground floor, to activate large areas of open plaza facing into Elizabeth Qua. It will also incorporate exhibition spaces, a lobby and conference facilities.
Planning Minister Rita Saffioti said Chevron’s new headquarters will contribute to delivering a vibrant, activated Elizabeth Quay, which is ultimately expected to be home to 1,400 people and 10,000 workers.
“It is great to see the area taking shape with Far East Consortium’s Towers development recently reaching practical completion and CA & Associates’ EQ West development expected to commence works on their site later this year.
“Hundreds of millions of dollars of taxpayer’s money was used to create Elizabeth Quay, and this government is 100% committed to making it work and becoming something all Western Australians can be proud of.” Saffioti said.
Australian Property Journal
