This article is from the Australian Property Journal archive
THE federal government has extended its lease over 19,000 sqm in the Melbourne CBD, owned by Real I.S., for another 10 years in an agreement that will see the German institutional investor carry out improvements over the building.
Munich-based Real I.S. acquired the building at 661 Bourke Street, known as Defence Plaza, in 2011 for $100 million. Built in 1990, it has been leased long-term to the Department of Defence.
The deal is a win for Real I.S. as both public and private tenants of offices have been reassessing their real estate requirements during the pandemic. A high number of workers are wanting flexible workspace near their homes, while some believe the HQ venue will be an important but significantly smaller part of the office ecosystem moving forward.
“We are very pleased to continue our successful partnership with the Commonwealth of Australia. Another aspect of this success is that we are enabling new work concepts with modern and flexible spaces to be implemented together with our partner,” said Michael Wecke, managing director at Real I.S. Australia Pty. Ltd.
“We aim to expand our active asset management in Australia even further. The planned renovation of the property is in line with this strategy which will increase the value of the property.”
Real I.S. has continuously upgraded the property during its ownership, including a partial renovation in 2018, and a NABERS rating of 5 stars has been achieved in recent years.
Under the terms of the renewed lease the building will be extensively renovated, including upgrades to the exterior façade in the entrance area and building services, and renovation of the amenities.
Works are scheduled to be carried out in several phases so the tenant’s operations will only be restricted to a minor extent.
