Cbus Property will spend $12 million to $15 million on a retail redevelopment at one40william to counter what it describes as the “perfect storm” of external factors that resulted in the building being circled by road closures that forced some of its retailers to close and inflicted tough trading conditions on others.
The redevelopment at the $350 million, 2 1/2 -year-old building, lauded for a design that incorporated a new office tower with heritage buildings, is expected to start in February.
“From a retail perspective I have to say our retailers ran into a perfect storm,” said Chris Hardy, senior asset manager at Cbus Property, a subsidiary of Cbus, the construction industrys national super fund.
“Long delays were experienced for 3000 tenants occupying the office tower and then we had to contend with the closure of William Street and part of Wellington Street and Forrest Place infrastructure works for 18 months,” Mr Hardy said.
One40william was designed to connect well with surrounding buildings but bankruptcy action stopped work on Raine Square and a retail renovation started at the GPO Building, blocking links there as well.
“Our retailers were also feeling the effects of the GFC and the national decline in the retail sector, driven in part by high levels of personal savings and an increase in online purchasers affecting all aspects of retail sales across Australia” Mr Hardy said.
“All of these issues had an effect on our retailers.”
The flagship Cbus property opened with 75 per cent of its retail space occupied but exiting tenants have reduced that to 45 per cent.
“Ive been in the property industry for 30 years and have never seen so many external factors occur at the same time,” Mr Hardy said.
“Its difficult for retailers to exist when the public cant get to them.”
Mr Hardy said Cbus Property was forced to reassess because it could see no end to the road work and infrastructure issues but no rental discounts were offered to retain tenants.
“Theres no doubt we have lost some tenants but we spent an enormous amount of time working with them,” Mr Hardy said.
“Cbus Property is creating a significant new brand within the Australian property industry and to date we have been very successful creating a boutique office brand and with this in mind we have acted very responsibly with our retail tenants.”
Cbus Property hopes to get development approval in time for a February start, work finished by June and all retail spaces open by September.
The buildings new retail theme will focus on a new food precinct for the Perth CBD.
“We want to reinvent a retail destination in Perth that will feel different and unique,” Mr Hardy said. “The arrival of Jamie Oliver has been an unbelievable start, and has acted as a cornerstone and game changer.”
Sydney architects Rice Daubney designed the development, which includes a glass roof over Postal Place as well as a roof over Railway Lane to create new dining areas.
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