The high vacancy in Perth’s CBD office market is making it possible for a new wave of tenants to secure a city foothold.
Previously blocked by high rents and resistance to the subdivision of floor plates, the new city tenants are securing significant office upgrades for relatively modest rent increases.
The lineup of new arrivals includes specialist insurance brokerage KBI and legal industry experts KBE Legal Hub, who are now based in a newly fitted out office at 140 St Georges Terrace after an office relocation managed by Colliers International’s Tenant Advisory and Occupier Services division.
“With an approaching lease expiry for their office in an older style building on Hay Street in West Perth, KBI and KBE Legal Hub were keen to explore their upgrade options while also securing enough space for future growth,” Colliers International Director Tenant Advisory Theo Smyrniotis said.
“After a search that took in West Perth and the CBD, the businesses saw a fitted out office at 140 St Georges Terrace and through our negotiations with the landlord, were able to have the fitout replicated in vacant space on the southern corner of the building where they also have Swan River views.”
Mr Smyrniotis said the availability of quality office space in Perth’s CBD allowed KBE Legal Hub and KBI to secure a modern office in an A-grade building that was closer to their client base for just a little more than they had been paying in West Perth.
“A lot of businesses that are taking advantage of the market conditions in Perth are jumping one evolution in the standard of accommodation they occupy,” he said.
KBE Legal Hub Managing Director Chris Bates and KBI Managing Director Travis Kenzle said the move into the CBD had a significant impact on their businesses and office culture, and allowed them to create a vibrant workplace for staff, clients and friends.
“We are striving to build an environment where people genuinely look forward to coming to work each day, with a cafe style feel and open plan work space to cultivate the innovation and collaboration that has been at the core of our success since our inception in 2014,” Mr Bates said.
“With the Western Australian market rapidly strengthening and business confidence on the up, we are now growing so quickly that we will likely need to look for a second office in the CBD far sooner than we anticipated.”
Colliers International Executive Tenant Advisory Taylor Phillips said it could take six months and in some cases up to a year to run an office search, analyse available options and complete lease negotiations.
“At the end of the process, Perth tenants are relocating into quality office buildings where staff benefit from better work environments and a higher level of nearby amenity so it becomes a compelling proposition,” Mr Phillips said.
The Property Council of Australia will tomorrow release the Office Market Report, which will include a snapshot of the vacancy and supply in the office markets in Perth’s CBD and West Perth.