This article is from the Australian Property Journal archive
RUPERT Murdoch has put out feelers in Melbourne's office market looking for new accommodation for the Herald Sun and The Australian.
Murdoch’s the Herald and Weekly Times is after 16,000 sqm of space and has engaged Jones Lang LaSalle to review opportunities which includes the publisher renewing its existing lease, signing up to a new purpose built facility or relocating to a new office building.
HWT is currently headquartered in Southbank and pays approximately $300 per sqm for 12 floors in two office buildings – the HWT and IBM towers, which are owned by DB RREEF’s as part of the Southgate restaurant, retail and office complex.
The Herald Sun occupies 11 floors at the 40 City Road tower, whilst The Australian has a full floor in the adjoining IBM Tower at 60 City Road.
HWT moved to Southbank in 1995 after more than 80 years at its landmark Flinders Street newspaper offices. HWT’s 15 year lease expires in December 2010, meaning it must strike a deal soon if it requires a purpose-built building.
HWT has a printing facility at Fisherman’s Bay on the fringe of the Docklands precinct.
But sources say HWT may stay at its current premises because DB RREEF will go to extraordinary lengths to keep the tenants. The trust is set re-sign IBM at Southgate to 60 City Road.
However, IBM, which originally leased the entire 32,434 sqm at 60 City Road in the early 1990s, will reduce its requirements to 20,000 sqm and is expected to re-negotiate a $300 per sqm deal, which is actually below the $400 plus per sqm it currently pays for the privilege to tenant the property.
If HWT does decide to move, it will not be the first newspaper/publisher to look for new change.
Over the past 24 months, Fairfax has been negotiating and eventually sold The Age site to the Industrial Superannuation Property Trust and Axiom, and is now looking to relocate to a new home at the Docklands precinct, once its leaseback agreement with ISPT and Axiom runs out.
HWT will join a list of corporates in the market for either new space or to re-negotiate better deals at their current accommodations.
The Commonwealth Bank has put out a tender requiring 25,000 to 30,000 sqm of office space and has ruled out cozying up together with the ANZ Bank and National Australia Bank at the Docklands precinct.
CBA’s Melbourne headquarters is currently located at 385 Bourke Street, owned by the Commonwealth Property Office Fund and its lease expires in March 2009.
CBA occupies some 21,450 sqm of space at 41 level building and also has some 5,000-6,000 sqm of space on the corner of Elizabeth and Flinders Streets.
Sources said CBA could possibly renegotiate with owners the Commonwealth Property Office Fund to remain at its existing accommodation and expand on its current space requirements.
However, there might be a problem as CBA might not be able to expand at 385 Bourke Street because the building is 100% occupied and the nearest lease expiry, around 5,500 sqm occupied by CPA Australia, is in December 2009.
CBA’s spokesperson told Australian Property Journal that review process is likely to wrap up in the late third or fourth quarter of 2007.
Australian Property Journal
