This article is from the Australian Property Journal archive
MELBOURNE CBD’s infamous ghost office building, 357 Collins St, is being brought back to life with Australand rumoured to have signed a major bank as the anchor tenant.
Industry sources told Property Review that Australand Property Group has lured the Commonwealth Bank of Australia to 357 Collins St, the old ASX headquarters in the Melbourne CBD.
Australand bought the property last year from Chinese investor Maxicity for $45 million.
Before Australand spotted the investment opportunity last March, the 21-storey building had been vacant for over a decade after the ASX departed. The Chinese owners toyed with plans to convert it into residential apartments but never proceeded.
The CBA is believed to have leased approximately 8,000 sqm to 10,000 sqm — at the current A grade market rental circa $380 – $400 per sqm and offered incentives on the higher end of 12% – 20%, which is also at the current market level.
The bank will move into the building in early 2012 when the major refurbishment is completed.
As a result, the CBA will likely move out of the Commonwealth Office Property Fund-owned 385 Bourke St, where it had signed a five year lease renewal in April 2008 with a break clause in April 2012.
The bank has been planning to move out of 385 Bourke St since 2006/2007 and prior to renewing that lease with CPA in April 2008, it had put out a 10,000 sqm space requirement.
However the global financial crisis dissuaded the CBA and it put those plans on the backburner after it was widely tipped that the bank would move to Cbus Property’s $230 million CBW development at 550 Bourke St. As result, Deloitte took that space instead.
But those relocation plans were brought back to life late last year when economic conditions improved and the Bank delivered a record profit of $5.66 billion in FY10.
The CBA’s move means only three major requirements remain in the Melbourne CBD office market including Westpac for 16,000 sqm to 18,000 sqm; KPMG for 30,000 sqm; and Aurecon for 10,000 sqm. Westpac is reportedly staying put at 360 Collins St.
The CBA lease is a major coup and vote of confidence for Australand, which bought the disused 22,000 sqm Stock Exchange House last year.
The group undertook to upgrade the building to A grade office space as well as add extra space to take it approximately 31,300 sqm with an end value of $158 million.
Australian Property Journal
