This article is from the Australian Property Journal archive
One-time Collins Street landmark, Nauru House, is about to hit by a disastrous 80% vacancy rate.
Australian Property Journal has learned that most of the building’s 40,000 sqm key tenancies have found newer premises leaving the majority of the 50,600 sqm tower all, but vacant.
In 2004, QIC paid $140 million for the tower in anticipation that it could retain its existing tenants.
Exiting tenants include its major tenant the Victorian government’s Department of Infrastructure, which is vacating some 21,000 sqm, and shortly moves to the neighbouring new Southern Cross tower in Exhibition Street; the 10,000 sqm Australian Industrial Relations Commission tenancy to 11 Exhibition Street; the 3000 sqm Bell Potter tenancy to 101 Collins Street as well as a number of single floor tenancies, who have departed or are soon to depart Nauru House.
Commercial agents also believe the 5000 sqm Nauruan Government tenancy would be on “next to no rent” leaving QIC with little return for their $140 million investment.
Existing rumours in the Melbourne property market that Nauru House is affected by concrete cancer have been damned by QIC head of real estate Laurie Brindle.
Brindle told Australian Property Journal last night in a prepared statement that prior to the purchase of Nauru House, QICRE’s independent consultant team undertook a comprehensive review of the services within the building and structure.
“Particular attention was given to the review of the external façade and QICRE’s independent team of consultants provided a report that clearly states the structural integrity of the building is not compromised in any way,” Brindle said.
Brindle said any inference “”that 80 Collins Street is seriously affected by concrete cancer is patently incorrect.”
QIC bought the Nauru House from administrators after the former owners the Nauruan Government failed to repay more than $230 million in loans to American financial giant General Electric Capital Corporation.
GE now has its own real estate arm in Australia and has $1 billion invested in property.
The Nauruan’s also lost control of Sydney’s Mercure Hotel, the Royal Randwick Shopping Centre, the Downtowner and Savoy Park Plaza hotels in Melbourne as well as the Southern Cross site.
By Ted McDonnell
