Posted 25 October 2011 - 09:04 PM
government tenants tend to prefer larger floor plates. Government departments are generally quite large, encompassing a lot of employees, as a result they want all their department members to be located on the same floor for ease of communication etc.
Private sector firms are generally more nimble and smaller. they employee (for the most part) less people and as a result prefer, and can, make do with smaller tenancy areas. or where they are large and they can take up a whole floor of a smaller building and divide the floor plate into departments. Or if they are quite large, they can put corporate heads and assistants and other key personel on one floor, with other departmetns or support staff on other floors.
The point being, that given the size of government tenants, they are better suited to large floor plate buildings.
The primary tenants in victoria who can pre-committ to enough of a building that would enable a developer to access bank funding, are government tenants.
There is not enough private demand to pre-commit to a large building like gateway green. They wouldn't get nearly enough space taken up pre development to obtain funding. so the only way a site like that will be going up in victoria in the absence of significant pre-committment, is if minimal debt is required to fund the development.
In the absence of a large floor plate alternative site, a government tenant would probably shoot for something like GG. However, with an alternative popping up I would suspect government tenants will hold off 6-12-18 months before comitting to new space. in this instance, im suggesting that they'll go for the Roth Site.
The final point being, is that if you want to ensure a building goes up in victoria. make it appeal to government tenants or small enough in height and size that it can be taken up by privates.
on that note. anyone know which government tenants might have leases expiring in 2-3 years and be wanting to move?