This article is from the Australian Property Journal archive
LENDLEASE has nabbed the signature of NBN Co for 9,000 sqm at its Victoria Cross Tower, which will transform an entire North Sydney block, while Australia’s CBD office markets recorded their strongest net absorption rates since before COVID upended the sector.
NBN Co will be leaving Dexus’ nearby 100 Mount Street tower, where it signed up as a major tenant ahead of that building’s completion in 2019.
NBN Co will now occupy six floors from levels six to 11 when it relocates in mid-2026 to Victoria Cross Tower, which is being constructed immediately above the new Victoria Cross Metro station.
“The strength and reliability of the NBN network has allowed us to maintain hybrid work arrangements, providing employees with flexibility and in turn delivering cost-savings to the business over the next eight years through optimised floor space,” said Louise Bardone, executive manager corporate real estate, facilities and fleet, NBN Co.
“We’ve engaged in a competitive tendering process and have chosen to occupy the low-rise levels of Victoria Cross Tower to secure an attractive agreement.”
On completion later this year, the 42-storey building will accommodate up to 7,000 workers across 58,000 sqm.
Ventia, one of the largest essential infrastructure services providers in Australia and New Zealand, signed up last year for two floors, or 3,500 sqm of space.
Victoria Cross will also be home to One Playground’s new flagship outpost gym and biggest space yet, spanning four floors in the precinct’s podium building. The space feature five studios and a dedicated recovery area complete with infra-red saunas, and will host more than 200 fitness and wellness classes weekly. It is expected to open mid-2025, with membership and class presales to launch in the coming weks..
The Victoria Cross integrated station precinct will deliver 21 new retail and hospitality brands, 14 of which are now open in the concourse and new pedestrian laneway. Operators include Marrickville Pork Roll, Mary’s and McDonald’s. The remaining retailers will open in early-2026, anchored by multi-level food and beverage destination Miller House.
The building will also be net zero carbon and all-electric, powered by 100% renewables, and is targeting a Platinum WELL and 6-Star Green Star rating.
CBDs enjoy high net absorption rates
Meanwhile, Australia’s CBD office market saw its highest annual net absorption result in six years in 2024, showing a rebound after the pandemic emptied office buildings and employees embraced working from home, forcing companies to rethink their real estate requirements.
New data from JLL shows Australian CBD office market net absorption totalled 163,500 sqm last year.
The national CBD office market vacancy rate closed 2024 at 15.2%.
Sydney’s CBD was one of the strongest performing office markets, recording annual net absorption of 86,400 sqm – the strongest annual result since 2015. Brisbane was another standout performer, with vacancy falling to a 12-year low of 9.8%, on the back of a fifth consecutive year of positive net absorption.
Also putting in a strong showing was the Adelaide CBD, recording positive annual net absorption of 41,600 sqm in 2024 – three times higher than the 20-year long-run average of 13,800 sqm.
Melbourne CBD is “starting to show signs of stabilisation”, with positive net absorption for prime grade assets recorded over the second half of 2024, while Perth CBD recorded annual net absorption of 11,300 sqm across the entirety of 2024 – the fourth successive year of positive net absorption.
The Canberra market showed positive quarterly demand and its vacancy rate of 8.0% remains below the 20-year long-term average of 8.9%.
JLL head of research – Australasia, Andrew Ballantyne said 2024 has provided “greater clarity” on office market trends.
“The consistent theme across the office sector is strong activity for assets with high levels of amenity, strong sustainability credentials and those that are in close proximity to public transport options.”
“Most organisations are taking a disciplined approach to headcount growth. However, the Australian labour market has remained very resilient and shows that organisations will make tactical hires to support their growth ambitions. High quality office space is part of the attraction and retention strategy for knowledge-based sectors.”
In a further positive sign for the office sector, sublease availability declined to the lowest level since the June quarter of 2020, to 1.3% of total stock.
