The state government has pulled the pin on plans to move a major department to Northbridge, following concerns about the viability of the project.
In July, Business News revealed that the government had selected Perth developer Urban Flux, which shares the same directors as Devwest Group, to develop a 10-storey office tower on Francis Street.
Urban Flux lodged plans for the $110 million tower in August, which was set to contain 20,000 square metres of A grade office space.
The property, previously occupied by European Foods, was set to house the Department of Local Government, Industry Regulation and Safety, formerly known as the Department of Mines.
The move was set to cost taxpayers about $21 million a year.
The department is currently split between four offices in Perth, East Perth and Cannington, and has been planning to move for several years.
A spokesperson from the Department of Housing and Works, which handles departmental office requirements, this week confirmed the deal had fallen through.
“The State has decided it will not progress with a lease for a site in Northbridge,” the spokesperson told Business News.
“Parts of this process are confidential and it would be inappropriate to comment further at this time.”
Devwest also declined to comment for confidentiality reasons.
A document obtained by Business News last year showed that the government was set to occupy the entire building.
The deal hinged on the sale of the property, with Knight Frank Australia running a campaign to divest the asset last year.
But Landgate records show the building is still owned by the Re Store family.
The development comes as Western Power is in the market for new space, with that agency requiring about 20,000sqm.
Industry sources say the government owned utility is expected to move into 100 St Georges Terrace following INPEX’s exit in May.
