ConocoPhillips eyes Capital Square for its new office lease
Exploration and production company ConocoPhillips is eyeing Malaysian-backed AAIG’s Capital Square in Perth for its new 10,000sq m office lease, sources say.
The operator of the Barossa joint venture, an offshore gas and light condensate project that will provide a new source of gas to the existing Darwin LNG (DLNG) facility, is said to be running the ruler over a lease deal with AAIG’s backer, Malaysian developer Victor Goh.
ConocoPhillips has been on the hunt for a year after it was awarded the approval of the Barossa project last year in an early sign of a revival in the mining and resources industry in Western Australia.
Sales of office towers to the tune of $1 billion are expected this calendar year while office leasing – a barometer of business activity – has ramped up, albeit helped by rental incentives.
Perth office rents are also growing for the first time since 2013 amid consecutive vacancy declines over the past two years.
Prime face rents in Perth’s CBD office market lifted 1.1 per cent during the
second quarter of 2019 according to CBRE.
ConocoPhillips’ target Capital Square is already home to Woodside’s new global headquarters. Woodside leased the first 32-floor tower to be built on the former Emu Brewery site.
The strong leasing tenure at that tower has led to investor interest in the property, a deal that could amount to about $700 million. Investors have been looking to Perth as a counter-cyclical investment strategy.
Two more towers – a hotel and residential building – are slated for the site at Mounts Bay Road, but it is understood new options are being considered for those two buildings, with ConocoPhilips possibly filling part of it.
While ConocoPhillips has looked at other properties, sources say Capital Square is the hot favourite.
ConocoPhillips and AAIG representative Lavan lawyers declined to comment.
AAIG has other active interests in Perth’s commercial developments. In 2016, it teamed up with Fini Group to buy two sites – lots 2 and 3 – at Elizabeth Quay to develop a new $85 million luxury apartment and hotel development.
