MAKING SPACE FIT FOR BUSINESS – 4 December 2017

Katie McDonald – 4 December 2017
Posted in BusinessNews Paper and Online

 

 

CBD SHIFT
Hexagon Mining is another business to consolidate its several Perth locations under one roof in the CBD.

Hexagon will occupy 1,200 sqm of space within Primewest’s Australia Place on William Street from March 2018. The seven-year lease was transacted by Sheffield Property Group.

Sheffield associate director Roly Egerton-Warburton said the office fit­ out had been constructed as a ‘speculative fit-out’ – a fit-out built in advance of securing the tenant – which had spared Hexagon the task of project managing a fit-out themselves.

This was part of a speculative fit-out strategy, which Sheffield specifically de­signed with Primewest for Australia Place, and had been rolled out across four floors (1,200 sqm each) of the building, he said.

These floors have since been leased – two by Sheffield, securing a seven-year lease with Resolute Mining as well as Hexagon.

“If you look at the Perth leasing transactions that have taken place in the last few years, you’ll see most have transact­ed in fitted space.” Mr Egerton-Warburton said.

“The landlord may be spending capital in advance but the immediate benefit of reducing letting-up periods is signifi­cant.”

Mr Egerton-Warburton said extended letting-up periods had been a burden to landlords in recent times.

“You need to provide something unique to activate space and secure a tenant,” he said.
“Many tenants that inspect a fully re­furbished, but not fitted out, vacant floor just can’t visualise it in its final form.
“However, if they step into a fitted floor they start thinking ‘well, our accounts department can go over there… our project team over there’. You don’t need to know too much about the sales to understand the importance of visualisation.”

 

MARKET

Sheffield’s Mr Egerton-Warburton said there had been a lot of noise around vacancy and commercial pressures.

“If stock is priced correctly, is of high quality and there’s a motivated leasing agent and landlord working together …. then these variables trump the official CBD vacancy rate and the market sentiment that surrounds it.” he said.

“There’s been a sustained improvement in commodity prices and increased positivity in the oil and gas sector. This fundamentally drives Perth commercial property.
“Firms are recruiting and repositioning themselves for the next wave.”

Several of his 2017 leasing deals had been for companies in the resources sector; Australis Oil & Gas moved into Allendale Square earlier this year shifting from the CBD fringe into an A Grade office tower, as did Metals X and Westgold, which Sheffield secured as sub-tenants at fitted out space on 197 St Georges Terrace.

“A lot of surplus space has been leased; we’re starting to see real recovery in the commercial property sector, and much earlier than expected.” he said.

“We now have tenants competing for the same space and that hasn’t really happened in the past three years.
“Perth commercial property is starting to move quickly – landlords who continue to improve their assets are enjoying the recovery.”

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