Luxury hotel operator Stamford Land Corporation Ltd has announced it will begin construction of a $140 million, 13-level office tower at 905 Hay Street this month, with the building contract for the project having been awarded to Diploma Constructions (WA
Luxury hotel operator Stamford Land Corporation Ltd has announced it will begin construction of a $140 million, 13-level office tower at 905 Hay Street this month, with the building contract for the project having been awarded to Diploma Constructions (WA) Pty Ltd.
The site, which is adjacent to the Woodside Plaza building, had originally been earmarked for a hotel, but viability issues and strong demand for office space prompted a change in direction.
When the project is completed in 2011, it will add 13,000 square metres of space to the market.
A statement about the project is pasted below:
The west end of Perth's CBD is set to be home to a new office tower by February 2011 with the announcement by developer Stamford Land Corporation Ltd (SLC) that it will begin work this month on the construction of a $140 million 13-level building at 905 Hay Street.
The announcement marks the first project in Perth by Stamford Land Corporation, the biggest owner/operator of luxury hotels in Australasia and one of Singapore's top three biggest investors in Australia. The company currently owns/operates nine hotels, and has three luxury apartment projects under development in Sydney and Auckland with a total value of A$750 million.
The new building, located at the western end of Hay Street between King and Milligan Streets, will add 13,000sq m of A-grade office space to Perth's CBD leasing market and will have a four-and-a-half star ABGR rating.
The Bank of New South Wales heritage building, which fronts onto Hay Street, will be incorporated into the new development.
The development is adjacent to the Woodside Plaza building. Stamford Land Corporation Ltd, which is listed on the Singapore Stock Exchange, bought the prime 9000 sq m site - the St Georges Terrace portion of which is now home to the Woodside building - in 1996 for $20 million from Lord McAlpine. The site had originally cost Lord McAlpine $100 million.
In 2000, Stamford Land Corporation Ltd sold the Woodside Development to Deutsche Asset Management but retained the Hay Street portion of the original site.
The Hay Street frontage, which will now be home to the new office tower, had been earmarked for a 5-star hotel - but Stamford Hotels and Resorts Chairman C K Ow said despite the "bargain" price paid for the site and years of feasibility planning on a hotel/residential apartment development, the viability of the project simply did not stack up.
As a result, Perth remains the only major city in Australia that does not carry the badge of the luxury Stamford hotel brand.
"Until the resources boom took off, we felt that the depth of the hotel market in Perth was unable to absorb the supply of a 400-room new hotel in the CBD precinct," said Mr Ow.
"Given Perth's record low vacancy rate and ongoing demand for office space, Stamford Land has decided to feed the city's appetite for commercial spaces instead - so after two years of planning, it has finally received development and building approvals to erect an A-grade office building on the site."
Mr Ow said Stamford Land Corporation Ltd was confident the project would be well received by the office leasing market, due to the quality of design and its unique location at the western end of the city with direct access to St Georges Terrace in what has emerged as the oil and gas precinct of the CBD.
The Stamford Hotels and Resorts Chairman will visit Perth this week to sign the building contract with Diploma Constructions (WA) Pty Limited, with preliminary site work already underway. The substructure and car parking of the new office tower are already in place, having been constructed at the same time as the Woodside Plaza building.
Diploma Constructions Managing Director John Norup said his company was delighted to have won the contract for the new office tower.
"We are very pleased to have the opportunity to construct what will be an iconic new building in the city's west end," he said.
Colliers International and CB Richard Ellis have been appointed the joint leasing agents for the new building.
Colliers International Director of Office Leasing, Ian Campbell, said the decision by Stamford Land Corporation to proceed with the development without a pre-commitment was a strong indicator of the continued strength of the Perth CBD office leasing market.
"The appeal of the development, which is strategically located in the CBD's western precinct, will be very strong and the fact Stamford Land Corporation is not seeking a pre-commitment before the commencement of construction underlines the general confidence in the market," said Mr. Campbell.
"Demand is expected to remain strong despite a number of big projects due for completion in the next three to four years, with the new supply due to come online in the Perth market almost fully spoken for.
"The large and efficient floor plates, excellent natural light and rents expected to be substantially less than QV1 and other nearby locations will make 905 Hay Street a compelling business case for many corporate organisations in Perth."
CB Richard Ellis Senior Director of Office Services, Andrew Denny, said the development had been designed to meet demand from a wide mix of tenants, including those in the oil and gas, financial services, engineering and government sectors.
"The building has been designed to achieve a high level of amenity and efficiency," said Mr Denny.
"Encouraging interest has already been shown in the development, and with the commencement of construction activities interest is expected to escalate. As an indicator of this, terms have been agreed to lease the entire Bank of New South Wales Building and all of the ground floor of the office tower, which will include retail and restaurant uses."
