Commercial property SPECIAL REPORT Commercial property

FEATURE

Katie McDonald [email protected] 6-PAGE FEATURE Although the pandemic has emphasised business can be done from anywhere, The office is still commercial property players open for business

are banking on the DEVELOPMENT: Just two new office buildings are under construction in the CBD, with several more projects proposed. value of four walls. Photo: Gabriel Oliveira

MONG the many lessons debates and hypotheses about the Mr Gillard told Business News. second development without earmarked for most of that space. learned during this period future requirements of working “It’s a counter cyclical market to tenant pre-commitment, but Last week, the state gov - Aof worldwide upheaval, environments. the east coast; we can see there’s overall was not perturbed by the ernment approved Brookfield one of the clearest in the Western But has COVID-19 truly under- a significant amount of infra- CBD office vacancy rate of Properties’ two-tower project on Australian context is that busi- mined the value of the office and structure spend and [resources] just over 20 per cent (the highest Lots 5 and 6 of the waterfront site, ness knows no boundaries. put its role in jeopardy? projects coming up. in the country). which is expected to deliver more Whether people are working GDI Property Group manag- “Once the borders are lifted, “While the vacancy is high, than 52,000sqm of office space. from a multi-storey office com- ing director Steve Gillard doesn’t you’ll have huge population the vacancy in premium stock in The project adds to Brookfield’s plex or remotely, events of 2020 think so. growth from those projects. Perth is only about 6.8 per cent existing development pipeline, have demonstrated that ‘busi- His confidence is backed by “And there’s potential for some … and there’s limited continuous which includes Chevron’s new ness as usual’ does not necessarily GDI’s intentions to build two new of the Hong Kong companies to floors in great locations,” he said. $360-million, 54,000sqm head- depend on the physical environ- offices in Perth’s CBD. reside in Perth, from the point of “We found that in the last cycle, quarters adjacent to Lots 5 and ment, at least in the short term. The Sydney-based ASX-listed view of time zone.” a lot of tenants went into space 6 at Elizabeth Quay, now under Amid enforced crash courses in group has had Perth top of mind The group has lodged a devel- they didn’t want to because it got construction. remote working and virtual meet- in recent years, actively building opment application for a 9,500 down to close to zero vacancy … Also under way is Malay - ings, offices across major cities its portfolio of offices, which square metre timber-steel hybrid but people want a St Georges sian-backed AAIG’s Capital have sat empty, the staple hustle comprises Westralia Square and office adjacent to its Westralia Terrace address with views of the Square Tower 2, comprising and bustle of workplace lobbies three additional properties that Square building, with the com- Swan River. 25,200sqm of office accommoda- silenced by the threat of a highly form the Mill Green Complex on pany also progressing plans to “A lot of it [vacancy] is older tion, next to Woodside Petroleum’s contagious virus. . demolish and build a new office buildings, which will be refur- headquarters. While Perth’s flattening of the It added another asset to its within the Mill Green Complex. bished or knocked down. JLL’s Q3 ‘Perth Office Market COVID curve has put it in good collection last year, paying $12 Once complete, those develop- “And the beautiful thing is, Snapshot’ outlined that devel- stead, cities such as Melbourne million for 180 Hay Street in East ments could lift GDI up the ranks there are not many development opment proposals for both the haven’t been as lucky, with some Perth, the former headquarters of Perth’s top 10 commercial prop- sites around.” Perth CBD and West Perth office white-collar professionals work- of Chamber and Commerce and erty owners, determined by net market remained limited, given ing almost entirely from home Industry of WA. lettable area, to become one of Office demand elevated vacancy rates. since the start of this year. And Mr Gillard is planning to the state’s largest office owners More than 324,000sqm worth Proposed new office projects The pandemic has brought the keep Perth firmly in his sights. (see page 32). of new office stock is either pro- were likely to require significant function of a traditional office “We’d like to buy more, we’re Mr Gillard said the group posed or under construction in pre-commitment to proceed, into question, sparking many just looking for opportunities,” was unlikely to proceed with its the CBD, with Elizabeth Quay the report noted, outlining a

28 | FEATURE

home, but increasing space ratio Office Developments requirements in light of social dis- tancing could potentially offset Perth CBD Suburbs (developments >1,000sqm) any reduction in head count. Under construction 400,000 – Under construction “Many groups, particularly in Under construction Chevron HQ, Elizabeth Quay Planned hArbour Timber Office, the IT sector, have tried the work- Capital Square Tower 2 Recently completed ABN Headquarters, Leederville ing-from-home model for a large percentage of their staff in the Planned 300,000 – Planned past, with most if not all reverting Broofield Properties Lots 5 & 6, Elizabeth Quay Stage 2 Primewest Joondalup Master Plan to the traditional model to encour- GDI Property Group Timber Office, Westralia Square Recently completed* >245,500sqm age collaboration, innovation, and Carillon City Office Tower 200,000 – CBD PROPOSED Kings Square, Fremantle corporate culture,” he said. Brookfield Esplanade Tower OFFICE SUPPLY Manning Buildings, Fremantle “While vacancy will likely Bishops See Stage 2 500 Hay St, Subiaco increase in the official vacancy

SQUARE METRES (SQM) METRES SQUARE Echelon, South Perth figures in January, our strong 480 Hay Street 100,000 – Charles St, South Perth resources sector, and growing Capital Square Tower 3 302 Selby St, Herdsman education sector in the CBD, QV2 152 Risely St, Booragoon will have positive outcomes in QV3 0 – demand terms in the medium to Perth CBD Suburbs NEXT DC, Newcastle St, Northbridge The Campus Waterbank LOCATION 188 Main St, Osborne Park long term. “One thing history has taught Source: Y Research, JLL, Business News | *Recently completed in last 18 months us in WA is our markets can swing very quickly and absorb space in further eight office developments 22,000sqm, 21-storey office tower. “New developments happen vacancy in the premium stock short periods of time.” planned for the CBD, totalling Savills WA managing director because tenants want a new falling from 8.1 per cent to 6.8 per JLL WA managing director 184,000sqm, however construc- Graham Postma said although product that’s not available in the cent and A-grade falling from 18.5 John Williams said while Perth tion start times are yet to be COVID-19 had disrupted office marketplace; they want the best. per cent to 15.8 per cent in the 12 recorded three months of little finalised for most projects. markets, casting some doubt over “What needs to be highlighted months to July 2020. to no activity during the peak of This includes Dexus Whole- future demand levels, tenants still is we’ve got very big differentials “It’s that flight to quality that lockdown, tenant enquiry levels sale Property Funds’ Carillon had a strong appetite to reside in between stock. will continue.” had bounced back. redevelopment between the Hay the newest buildings. “Pre COVID the Perth CBD, Mr Postma said COVID-19 had At the same time there had and Murray street malls, which, “That’s what drives these new and more particularly the pre- prompted some businesses to been an increase in availability of in addition to retail and enter- developments,” Mr Postma told mium and A-grade sectors of the reduce their office footprint and tainment tenancies, features a Business News. market, were recovering, with encourage staff to work from Continued on page 30

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T:08 63807444 I Level 1, 26 Queen Street, Perth I www.opraprojects.com.au | 29 FEATURE COMMERCIAL PROPERTY

$ 367m CONSTRUCTION COST BROOKFIELD’S TWO-TOWER ELIZABETH QUAY PROJECT

APPROVED: Brookfield Properties has received approval for two towers at Elizabeth Quay, featuring more than 52,000sqm of office space. Image: Rex Architecture, Hassell The office is still open for business

From page 29 an alternative for staff to work office is under construction, certain of the virus’s impact, even Spacecubed have both expanded remotely, or close to home. and will add a further 2,000sqm once a vaccine is found. their offerings during COVID-19, sub-lease opportunities, with JLL “I think that’s really more of office space to the Fremantle “There’s no doubt people are adding more CBD space to their recording a negative net absorp- appropriate for London or New market. still seeing the value in their portfolios. tion of space for the third quarter York, those bigger global cities, Also in Fremantle, Silverleaf’s office space and accommodation,” Beyond a place to work, Dexus of 2020, largely driven by Worley where you’ve got one- to two-hour restoration of the heritage-listed Mr Mount said. executive general manager Kevin Parsons offering two floors commutes,” he said. Manning Buildings is proving “And for reasons outside of the George said the reactivation of for sub-lease at 240 St Georges “Perth, it ain’t that big. popular. office sector, there’s continued the CBD’s office buildings would Terrace. “And the net effective rents for Norfolk Commercial manag- strong demand for office prop- play an important role in Perth’s “None of this has played out tenants [in the CBD] are unbeliev- ing director Sonia Fairhead said erty investment as an asset class overall economic recovery in the long enough for anyone to actu- ably attractive … so I just don’t the team had leased most of the (see page 31). coming months. ally have a clear sense as to how see enough scale to impact the 3,000sqm office building in recent “Although there is some supply Some workforces were yet to it’s impacted the market,” Mr Wil- market.” months (just one 133sqm tenancy coming, I think you’ll start to see fully return to the office, with liams told Business News. remaining) with most tenants increasingly more people focus occupancy levels across Dexus’s “But what I can say is tenants Working from the coming from outside of the Fre- their attention on the Perth office Perth buildings, which includes are out there looking around for ’burbs mantle area. market than what we’ve seen in 240 St Georges Terrace, now at 77 space in the same numbers at The appeal to work from home – Y Research director Damian the past few years. per cent of pre-COVID levels. least what they were this time or at least, closer to home – varies Stone said Fremantle’s hospi- “Out of all of this, I think there “It’s important for organisa- last year. depending on whom you ask. tality strip, train line and rents will be a level of innovation and tions to encourage their workers “So the next three to six But the flurry of new commer- presented all the drawcards for change that we haven’t seen in back to the office, both to drive months will be interesting to see cial office stock taking shape office demand: amenity, conven- the use of office space.” economic activity in our CBDs whether that activity translates across Perth’s suburban areas ience, transport connectivity and and their own business produc- into deals.” over the past 18 months could affordability. Future tivity,” Mr George said. The market remained favoura- potentially influence future “The city [Perth] is still going to CONVENiO, an Airbnb-like “The value of the CBD and ble for tenants, he said, with many tenant preferences (see graph). be the primary option,” Mr Stone platform for the office market, is building amenity to support businesses facing upcoming lease More than 50,000sqm of office said. one emerging innovation. networking, and a place to expiry. stock has recently been delivered “If businesses come out to the Co-founder Peter Stansfield socialise after work, cannot be Beyond space requirements, across Perth’s inner and outer suburbs, it’s going to be this flight said he’d been in discussion with underestimated. Mr Williams said COVID-19 suburbs. to affordability. some Perth office owners since “Offices have a core role to had prompted a rethink of the The largest of these, Sirona “It comes down to what ten- launching in September. play in developing culture and office itself, with his colleagues Capital’s King Square Fremantle, ants want from a building or a The platform builds on the fostering collaboration and inno- nationally and globally increas- created 20,563sqm of new office location. premise offered by flexible work- vation, and businesses will need ingly referring to ‘hub and spoke’ space (leased to the Department of “And until we know how long space providers: on-demand, to understand the organisational models. Communities) with the redevelop- we’re going to live with the virus, short-term office space. cost and compromises of a dis- Under this model, businesses ment of the former Myer building. it’s really all up in the air still.” Perhaps one signal of future persed workforce versus the have a central ‘hub’, as well as Nearby, Yolk Property Group’s Urbis director of investment preferences, flexible work- opportunities before settling on satellite offices that provide six-storey mass-timber framed management Tony Mount is more space providers Liberty and a new normal.” 30 | | 31

PB | | PB FEATURE COMMERCIAL PROPERTY COMMERCIAL PROPERTY FEATURE

$ Appetite for 367m CONSTRUCTION COST BROOKFIELD’S TWO-TOWER ELIZABETH QUAY PROJECT Perth office investments

Limited new supply, high yields and a rebounding resources sector are elevating the appeal of Perth’s office assets.

Katie McDonald Perth’s relatively insulated nature [email protected] compared to other markets, with the economy underpinned by a ENSURING a secure return is strong resources sector and con- a dominant consideration for sumer confidence. investors at any time, but even “Property remains compelling APPROVED: Brookfield Properties has received approval for two towers at Elizabeth Quay, featuring more than 52,000sqm of office space. more so in an economic environ- from an investment perspective OPPORTUNITY: John Meredith says Fiveight is focused on the long-term investment Image: Rex Architecture, Hassell ment subdued by the pall cast by given the stable and greater horizon. Photo: Benjamin Horgan the COVID-19 pandemic. returns it offers compared to And office buildings are being cash and bonds,” Mr Desange The office is still open for business touted as the type of investment said. Major office sales calendar year 2020* John Meredith to lead Fiveight to fit that bill. “Additional to this, some earlier this year. From page 29 an alternative for staff to work office is under construction, certain of the virus’s impact, even Spacecubed have both expanded JLL WA managing director property sectors have been less Sale Net Lettable Remaining tight-lipped on Property price Area (square Buyer Seller remotely, or close to home. and will add a further 2,000sqm once a vaccine is found. their offerings during COVID-19, John Williams said COVID-19 volatile than equities, which has ($m) metres) potential acquisition oppor- sub-lease opportunities, with JLL “I think that’s really more of office space to the Fremantle “There’s no doubt people are adding more CBD space to their had not eroded investor appetite, been particularly pertinent in tunities, Mr Meredith said the Newspaper House, recording a negative net absorp- appropriate for London or New market. still seeing the value in their portfolios. having recently run processes the current environment.” Seven West company did not favour any par- 50 Hasler Road, 75.0 42,561 Primewest Media tion of space for the third quarter York, those bigger global cities, Also in Fremantle, Silverleaf’s office space and accommodation,” Beyond a place to work, Dexus for the sale of assets, both in and He said Perth’s office market Osborne Park ticular sector and had a flexible of 2020, largely driven by Worley where you’ve got one- to two-hour restoration of the heritage-listed Mr Mount said. executive general manager Kevin outside of the city. yields were another drawcard. mandate, anchored by a long- 20 Walters Drive, 60.5 14,837 Mineral BGC Australia Parsons offering two floors commutes,” he said. Manning Buildings is proving “And for reasons outside of the George said the reactivation of Those deals, he said, were According to CBRE, as of Sep- Osborne Park Resources term investment outlook. for sub-lease at 240 St Georges “Perth, it ain’t that big. popular. office sector, there’s continued the CBD’s office buildings would about two to four weeks away tember 2020, Perth prime office “We’re happy to look through 66 Kings Park Road, 4,700 Primewest Black Oak Capital Terrace. “And the net effective rents for Norfolk Commercial manag- strong demand for office prop- play an important role in Perth’s from being announced. market yields were 6.27 per cent, West Perth 33.1 the cycle, and if we see value or “None of this has played out tenants [in the CBD] are unbeliev- ing director Sonia Fairhead said erty investment as an asset class overall economic recovery in the “Money hasn’t gone away,” Mr compared to 4.83 per cent and particular opportunities that long enough for anyone to actu- ably attractive … so I just don’t the team had leased most of the (see page 31). coming months. Williams told Business News. 4.56 per cent for Melbourne and 12 Newcastle Street, 4,637 Dorado Undisclosed appeal to us on a long-term basis, Northbridge 24.2 Property ally have a clear sense as to how see enough scale to impact the 3,000sqm office building in recent “Although there is some supply Some workforces were yet to “COVID has not impacted the Sydney, respectively. then we’ll take advantage of them,” it’s impacted the market,” Mr Wil- market.” months (just one 133sqm tenancy coming, I think you’ll start to see fully return to the office, with capital markets to any large Looking at major international Chamber of Mr Meredith told Business News. 180 Hay Street, 12.6 4,925 GDI Property Commerce and liams told Business News. remaining) with most tenants increasingly more people focus occupancy levels across Dexus’s degree ... you’re still accruing office markets, prime yields were East Perth Group Industry WA When it came to the Perth “But what I can say is tenants Working from the coming from outside of the Fre- their attention on the Perth office Perth buildings, which includes superannuation, that cash is 2.6 per cent for Tokyo, 2.55 per office market, Mr Meredith was ’burbs 1162 Hay Street, 1,424 Mair Property Undisclosed are out there looking around for mantle area. market than what we’ve seen in 240 St Georges Terrace, now at 77 piling up globally and that cash cent for Hong Kong and 3.61 per West Perth 10.6 Funds confident of the asset class’s space in the same numbers at The appeal to work from home – Y Research director Damian the past few years. per cent of pre-COVID levels. needs to be invested. cent for Singapore. future. least what they were this time or at least, closer to home – varies Stone said Fremantle’s hospi- “Out of all of this, I think there “It’s important for organisa- “The issue is – and has been the “As investors prioritise security *Office sales (offers/settlements) >$10m | Source: Business News research “The reality is the physical last year. depending on whom you ask. tality strip, train line and rents will be a level of innovation and tions to encourage their workers issue for many years now – that and yield in a low-return environ- workplace is irreplaceable from “So the next three to six But the flurry of new commer- presented all the drawcards for change that we haven’t seen in back to the office, both to drive the amount of capital looking to ment, Perth will continue to be a owner-occupier deal for the 2020 comprises apartments in the the perspective of culture, com- months will be interesting to see cial office stock taking shape office demand: amenity, conven- the use of office space.” economic activity in our CBDs invest is greater than the assets target market,” Mr Desange said. calendar year so far: Mineral Pilbara region, the Old Swan munication and innovation,” he whether that activity translates across Perth’s suburban areas ience, transport connectivity and and their own business produc- available to invest in.” Resources’ $60.5 million purchase Brewery mixed-use building said. into deals.” over the past 18 months could affordability. Future tivity,” Mr George said. According to CBRE’s recent Office appetite of 20 Walters Drive Osborne Park (headquarters of Mr Forrest’s “The fortunate thing for Perth The market remained favoura- potentially influence future “The city [Perth] is still going to CONVENiO, an Airbnb-like “The value of the CBD and report ‘Investors Digging for CBRE’s report also shows that (see table). investment vehicle, Tattarang), is we’re starting from a position ble for tenants, he said, with many tenant preferences (see graph). be the primary option,” Mr Stone platform for the office market, is building amenity to support Deals’, more than $1.6 billion private investors are emerging as The Walters Drive property as well as a 50 per cent stake in of already depressed rents and businesses facing upcoming lease More than 50,000sqm of office said. one emerging innovation. networking, and a place to worth of capital is active in the frontrunner for office assets, formed part of BGC Australia’s the Roe Highway Logistics Park. elevated incentives. expiry. stock has recently been delivered “If businesses come out to the Co-founder Peter Stansfield socialise after work, cannot be Perth’s commercial property representing just over 50 per property portfolio, which the The group could potentially “Nationally we do see an inev- Beyond space requirements, across Perth’s inner and outer suburbs, it’s going to be this flight said he’d been in discussion with underestimated. market. cent of the Perth bidder profiles company is selling off. add another asset to its portfo- itable flight to quality from an Mr Williams said COVID-19 suburbs. to affordability. some Perth office owners since “Offices have a core role to That figure is based on CBRE’s in 2020. Remaining properties are lio in the coming months, as it occupier perspective, both in had prompted a rethink of the The largest of these, Sirona “It comes down to what ten- launching in September. play in developing culture and bid tally for recent sale cam - Next in line were listed entities believed to be valued at about is thought to be one of several location and workplace, and office itself, with his colleagues Capital’s King Square Fremantle, ants want from a building or a The platform builds on the fostering collaboration and inno- paigns of assets collectively (representing about 43 per cent $300 million, presenting signifi- investors vying for the Credit really that creates opportunities nationally and globally increas- created 20,563sqm of new office location. premise offered by flexible work- vation, and businesses will need worth about $350 million, with of the bidding market), with cant buying opportunities. Suisse-owned office tower at for investors who understand ingly referring to ‘hub and spoke’ space (leased to the Department of “And until we know how long space providers: on-demand, to understand the organisational domestic investors representing owner-occupiers representing Andrew Forrest’s prop - 190 St Georges Terrace, which is this and can deliver on true value models. Communities) with the redevelop- we’re going to live with the virus, short-term office space. cost and compromises of a dis- 94 per cent of bids. just over 3 per cent. erty arm, Fiveight, is one being marketed by both JLL and for tenants; I think it’s important Under this model, businesses ment of the former Myer building. it’s really all up in the air still.” Perhaps one signal of future persed workforce versus the CBRE WA head of capital That trend appears to be Perth-based group actively seek- CBRE. to flag that value is much broader have a central ‘hub’, as well as Nearby, Yolk Property Group’s Urbis director of investment preferences, flexible work- opportunities before settling on markets Aaron Desange said reflective of the Perth trans - ing opportunities. Tattarang recruited former than a pure race to the bottom in satellite offices that provide six-storey mass-timber framed management Tony Mount is more space providers Liberty and a new normal.” investors had taken notice of action market, with a single The Fiveight portfolio Lendlease and Mirvac executive terms of effective rents.” 30 | | 31

PB | | PB FEATURE COMMERCIAL PROPERTY

Data & Insights WA’s LARGEST COMMERCIAL PROPERTY OWNERS Ranked by size of total area in m2 and then by total assets

Net lettable Rank Company name Senior executive and title area (sqm) Properties owned

1 Forrest Place (6,543), 619 Murray St (3,950), Australia Place (15,626), IBM Centre 1060 Hay St (8,411), Joondalup House (4,352), 15 Ogilvie Road Mr John Bond (3,828), 267 St Georges Terrace (3,506), 251 St Georges Terrace - 255 SGT (625), 251 St Georges Terrace - 251 SGT (9,745), PW Osborne Park, 71 1 Primewest 194,548 Walters Drive (3,815), PW Diversified Income Trust No 2 - 20 Parkland Drive (4,825), PCCT - Quadrant, 1 William (23,399), Prime House - 8 Davidson Co-founder, executive chair Terrace, Joondalup (10,045) PCCT - Esplanade Property Trust (34,234), PW Office Trust No. 1 - 226 Adelaide Terrace (14,391), 66 Kings Park Road, West Perth (4,692), Newspaper House, Osborne Park (42,561) Mr Nick Ozich (38,396), Bishop's See 235 St Georges Terrace - 50% Brookfield, 50% Hawaiian (8,875 (Total: 17,750)), 2 Brookfield Regional director, property & 177,744 Tower 1 (85,762 ), Brookfield Place Tower 2 (33,349), EY Building (11,362) developments

Mr Kevin George 240 St Georges Terrace (47,275), Kings Square Welling Street - Dexus 50%, Dexus Wholesale Property Fund 50% (52,316), Carillon Hay 3 Dexus Executive general manager, 116,670 St Perth - Dexus Wholesale Property Fund (5,909), 58 Mounts Bay Road - Dexus Office Partnership 50%, Cape Bouvard Investments office 50%(11,170 (total 22,341))

Mr Miles Rowe, 225 St Georges Terrace (20,766), Place (43,517), Optima Centre Osborne Park (16,116), 181 St Georges Terrace (3,590), 303 4 Charter Hall Regional portfolio manager, 116,188 Sevenoaks St Canningron (20,837), Eastpoint Plaza 233 Adelaide Terrace (11,362) WA

Mr Steven Gillard, Mill Green Complex: 197 St Georges (26,336), 5 Mill St (7,148), 1 Mill St (6,648). Westralia Square (32,635), 1 Adelaide Terrace (19,967), 180 Hay 5 GDI Property Group Managing director 98,747 Street (4,925), 251 Adelaide Terrace (1,088)

Mr John McBain, 111 St Georges Terrace (18,896), Havelock House West Perth (4,856), 144 Stirling Street (11,042), 42-46 Colin Street, West Perth WA (8,439), 6 Centuria Group Joint chief executive 87,011 45 Francis St (22,013), William Square Northbridge (21,765)

Mr Lim Chow Kiat The Quadrant (23,309), Exchange Tower (34,479) 7 GIC Real Estate Chief executive 57,788

Mr Jonathan Callaghan 50% stake in QV1 (31,260 (Total: 63,964), Subsea7 House (11,447), Wellington Central (11,972) 8 Investa Property Chief executive 54,679

Mr Keith Stephens 235 St Georges Terrace (17,836), QBE House (19,807), City of Perth Library (3,500), 565 Hay Street (7,900) 9 Perth Diocesan Trustees Secretary & executive officer 51,143

Mr Matthew Lutman (29,070), 585 Hay St Perth - 50% Mirvac, 50% KEPPEL REIT (444.5 (Total:889)), David Malcolm Justice Centre - 50% 10 Mirvac Portfolio manager WA 45,010 Mirvac, 50% Keppel REIT (15,496 (Total: 30,992))

11 Data & Insights GET THE FULL LIST ONLINE businessnews.com.au/bniq/property-commercial-owners 38

All information compiled using surveys, publicly available data and contact with industry sources. Other companies may be eligible for inclusion. If you believe your company is eligible, please email: [email protected] WND: Would Not Disclose, NFP: Not For Publication, N/A: Not Applicable or Not Available.

32 | PRED CTET APIL casts its eye as retail bounces back

Floreat Forum

The retail sector is showing signs of re- Firstly, he says all of our retail proper- Go Swimming, Kumon Education and a specialities have outperformed the sec- covery following the COVID 19 emer- ties are either in Perth or Brisbane, the Ministerial Oš ce for the Local Member tor with the easing of COVID-19 restric- gency period according to Perth-based two capital cities to have endured the of Parliament.” tions.” property investment group APIL man- pandemic better than most other cities Research shows large-format retailers “Sta• working from home have been aging director Peter Hughes, who says and secondly, the majority of our retail specialising in homewares and furniture frequenting their local shopping centres, the company is now actively casting an shopping centres are neighbourhood like Harvey Norman, Spotlight and Amart as opposed to the major CBD and re- eye over retail properties to add to its shopping centres underpinned by strong performed strongly in Perth and Brisbane gional centres.” already strong retail portfolio. performing Coles and Woolworths su- with rents remaining fairly stable over the “JLL data also supports this, with turn- APIL targets properties with capital permarkets with a focus on creating a pandemic period. over accelerating by 6.2 percent for both growth potential such as large-format convenient shopping experience for Mr Hughes says COVID-19 created a food retailing nationally and WA’s house- retail centres and suburban neighbour- consumers. “nesting” e• ect, driving increased con- hold goods categories.” hood shopping centres in strategic lo- “Retail is proving to be robust with new sumer demand for household goods. “This indicates people are spending cations throughout Australia. businesses taking up premises that have Consumers took the lockdown oppor- more time at home, rather than being From its beginnings in 2001, the been o• ered-up by departing business- tunity to redirect their surplus cash to out and about.” company has established 28 prop- es succumbing to new shopping trends. upgrade their homes which resulted in At just $50,000 APIL has a low min- erty syndicates with more than 300 These new businesses are in the services increased patronage to Large Format imum investment to participate in a commercial tenancies across Australia sector, personal grooming, food and Centres such as APIL’s Freedom Life- property investment trust, meaning in- with a combined value of more than beverage, health and wellbeing,” he says. style Centre, Capalaba, 5 Clayton Street, vestors can spread their risk by investing $1billion. It manages more than 1,000 “With restrictions on travel, shoppers Midland and Joondalup Gate. The “con- in multiple syndicates across di• erent investors made up of individuals, com- now fi nd that they have surplus cash, venience” factor was paramount in con- locations and sectors.” panies, self-managed super funds and and they are spending it on themselves sumer’s destination of choice. Mr Hughes says a low threshold to in- trusts. particularly in personal grooming, food “You get in your car and drive specif- vest gives almost everyone a chance to APIL has in its portfolio such icon- o• erings or choosing to redecorate their ically to the larger retailer to make your participate in assets well beyond their ic Perth centres as Joondalup Gate, homes.” purchase. It’s safe, easy and convenient personal scope for investing. Flinders Square, Byford Market Place, “At Joondalup Gate for example, – you pull up in your car right out the Carine Glades Shopping Centre and which is one of our biggest retail cen- front of the premises,” he explains. Floreat Forum. tres, we’re in advanced negotiations with Future retail acquisitions will follow our For more information visit Mr Hughes says there’s no doubt that a fi tness group to occupy nearly 2,000 successful model of convenience-based www.apilgroup.com nationally the retail sector took a ma- square metres.” neighbourhood properties with fewer jor hit in the pandemic with mandated “Floreat Forum has also seen re- specialties and precinct-based large for- shop closures and enforced restrictions newed leasing intertest with two new mat centres underpinned by strong na- but APIL’s retail portfolio has weathered restaurants to join the Outdoor Forum tional retailers.” the storm quite well because of two Restaurant Precinct. This is on the back “JLL research backs this; it shows main factors. of recently fi nalising agreements with neighbourhood properties with fewer Commercial property SPECIAL REPORT

Data & Insights

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