This article is from the Australian Property Journal archive
FINANCING company Esanda will likely be told by its parent ANZ Bank to move back home when its lease expires at 85 Spring St in Melbourne's CBD.
Esanda currently leases approximately 10,435 sqm at Kador Group’s 85 Spring St.
Kador Group bought the 16-storey building in June last year for $47 million from the AMP Property Income Fund, just months after Esanda extended its lease at the building by three years.
Esanda is currently paying approximately $2.8 million per annum net in rent.
Industry sources said Esanda had put out the feelers earlier in the year in anticipation of its lease expiring at Kador Group’s 85 Spring St in 2014.
However one source said in the current economic climate companies are primarily focussing on costs saving and have put expansions plans or leasing new space on hold — particularly in the banking and finance sectors.
The source said in a bid to save on almost $2.8 million p.a. in rent, ANZ Bank will likely bring Esanda under one roof at the ANZ Tower at 55 Collins St.
AMP Wholesale Office Fund owns the 50-level building, which comprises 46,000 sqm of space and it is fully leased to the ANZ Bank.
Completed in 1981, the bank has 50 year head lease over the building and some of the space is currently available for lease.
Another source said Esanda can be comfortably accommodated at 55 Collins St, which currently has approximately 13,000 sqm of space for lease.
“Despite delivering record profits, the banking industry is looking to cut costs. ANZ Bank shed 1,700 jobs last year and by the end of this month another 1,000 jobs are expected to go.
“And right now Esanda is paying around $2.8 million at 85 Spring St, and there is backfill space at ANZ Tower. It does not make sense for Esanda to go out and lease new space, when its parent company, ANZ Bank, has 13,000 sqm vacant at 55 Collins St,” the source said.
Should Esanda vacate 85 Spring St in 2014, it will give Kador Group the opportunity to undertake significant refurbishment of the property, which is located in the Paris end, a tightly held office precinct, in the Melbourne CBD.
Property Review
