Mining companies dig deep into Perth's CBD office rental stock
Perth’s CBD would be a ghost town if it were not for the constant demands of bourgeoning resources companies.
The four big players – BHP Billiton, Chevron, Rio Tinto and Woodside – take nearly 20% of the CBD’s 1.5 million square metres of office space.
BHP, which is preparing to move into the city’s newest and most glamorous address, City Square, next year, takes up a massive 100,000 square metres of space spread across the CBD. Currently this includes 18,000 square metres in Central Park on St Georges Terrace and 15,000 square metres in 225 St Georges Terrace plus 3,000 square metres in 66 Murray Street, which is dedicated to training. The mining giant has other space in about four different buildings around town.
Four years ago BHP pre-committed to 40,000 square metres in the City Square project. Within the year this pre-commitment expanded to 60,000 square metres, which put the frighteners on several of the building owners who could ill afford to lose BHP as a tenant. However, the power of the resources boom has ensured that BHP will remain in its many leased addresses while expanding into City Square.
Meanwhile, over the past five years Chevron has been growing, with its initial 13,500-square-metre take-up of space climbing to about 68,000 square metres today. It is widely known that the oil company is looking to buy its own premises. Rio Tinto and Woodside each lease about 50,000 square metre of commercial space in the Perth CBD.
The Property Council WA deputy executive director Lino Iacomella agrees that the mining sector is the most important player in the CBD.
“Resources companies are the main driver of commercial office space in the Perth CBD, and increasingly those companies that are doing business with the core resource companies are becoming important players in the office leasing market,” he says.
In fact, most new office buildings going up have exposure to the mining sector.
“Mining companies are constantly bringing more people in to work in Perth. This creates a market not only for office space, but for new restaurants, shops and small bars and gives confidence for the very big projects like the Waterfront development and the state government’s Northbridge Link to go ahead,” Iacomella says.
Savills forecasts a 2.8% office vacancy rate for the September quarter. The report claims that the combined office take up from resources and associated supply companies account for more than half of the CBD’s leasing profile.
