Julie Matheson

CFP Business Specialist | Local Government Expert | Political Adviser

Pavilion Markets financial comparisons

On Friday 11 July 2014, Minister John Day approved amendments to Subiaco’s Town Planning Scheme No.4 to allow the owner and developer of the Pavilion Markets site and neighbouring site the option to build 16 storeys.

This decision has the hallmarks of being a rescue package and a power trip for the Minister.

The financial comparisons are telling:

  • The area owned by the promoter of 16 storeys is (3,784 +1,669) 5,453 sqm
  • In July 2007 the owner paid a total of $35.67million for the two sites in the locality at $6,418 per square metre
  • In December 2012 the Subiaco Hood Street precinct area of 7,882 sqm sold for $17 million or $2,1557 per square metre
  • In 2013 the Subiaco Coles site on Barker Road, an area of 3,518 sqm sold for $9.1million or $2,558 per square metre

It appears from these numbers that the site under Subiaco’s current Town Planning Scheme has an estimated value of somewhere between (5,453 x $2,558) of $14 million and some other number, but not $35.67 million.

Demolition by neglect

Demolition by neglect

So how does the owner make a profit given a cost base of $35.67million plus holding costs, plus the cost of redeveloping the site, and avoid providing markets to the long-suffering residents, businesses and visitors to Subiaco?

Let’s see, we lobby Subiaco Council to change the Town Planning Scheme so that we can get 19 storeys on the site.  FAIL.

We’ll go to Minister Day and with a stroke of a pen he’ll approve 16 storeys on the site.  SUCCESS.

There, a rescue package from the Minister in the making.

The obvious problem with Minister Day’s decision is there is no dead line on this approval.  There needs to be one.  This owner/developer has a history of being slow to develop this site.  The Pavilion Markets are under going demolition by neglect for seven years now and the Minister doesn’t seem to care.

The Minister hasn’t offered any rescue packages to the many businesses that have closed their doors or gone bankrupt as a consequence of this neglected market site.

It is now possible, after the Minister’s decision, that this site will not be developed, will change hands to the next speculator, and a demand made for a West Perth style office block to be built instead.  There is more money to be made in office blocks than retail, residential or short stay accommodation.

And don’t forget, in 2013 the Minister’s Development Assessment Panel approved short stay accommodation in a 9 storey development at 500 Hay Street Subiaco.  Is there enough demand for another one in Subiaco?

With a stroke of a pen, the Minister has ignored all good planning processes, ignored community consultation and provided a rescue package to an eastern states developer without any deadlines.

What a power trip!

One comment on “Pavilion Markets financial comparisons

  1. Colin Latchem
    July 14, 2014

    Great stuff Julie – are you sending these to Bret Christian as well? Colin

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