Huge 36-storey South Perth development cost soars by $143 million in five years

A Mill Point Road development has been given more time after construction costs blew out following a cost blow-out of more than $140 million.

PTS Town Planning was given a three-year approval for a $293 million 36-storey residential development at 86-90 Mill Point Road in South Perth.

Developers were granted the further extension, despite a $143m increase in construction costs since its initial application in 2020.

At the WAPC meeting on August 28, the request was approved to PTS Planning Pty Ltd to extend the commencement of substantial works from the original date on May 16, 2025, to May 16, 2028.

The original application in December 2020 had the cost estimated at $150m, when approved in 2022 estimated the cost jumped to $204m and has now soared to $293m.

A letter sent to the chair of WA Planning Commission by PTS Town Planning on August 25, acknowledged that the original three-year period granted was considered “sufficient” but it could not have been forecast that the construction costs would have increased “as they have”.

“There was a 41.25 per cent increase in construction costs from when the original application was lodged in December 2020 to when it was approved in May 2022,” the letter said.

“This resulted in the project not being viable once the application was approved.

“The project is now becoming viable, not as a result of the reduced construction costs, but as a result of improved revenue from increased apartment value.

“The original total project cost was $204 million, however, as a result of the significant cost escalations the development cost is now estimated at over $293 million.”

At present the 4755 square metre site is home to a temporary sales office and associated carpark with a majority of the land being vacant.

The development is for a 36-storey building with a three-storey podium comprising 179 residential apartments, cafe/restaurant, office and small bar.

The application to extend the time did not include any changes to the already approved development plans.

The development will be required to commence substantial works by May 16, 2028.