This article is from the Australian Property Journal archive
DEVELOPER V-Leader is backing the rebound in Melbourne’s CBD office market, removing the hotel component of its 600 Lonsdale Street project to instead deliver an all-office 40-storey tower.
V-Leader has received approval for the revised design, nearly two years after it got the green light for a tower with a 288-room hotel above 16,500 sqm of A-grade offices as part of the Victorian government’s fast-track approval process in response to COVID.
Now, the legal precinct development will have $400 million, 30,000 sqm of offices and ground floor retail.
Melbourne’s vacancy rate blew out from 3.2% in 2019 to 11.4% in January, according to the Property Council, as COVID emptied cities around the globe. Heading into this month, Melbourne’s office occupancy rate had improved from 15% in February to 32% as mask mandates and work-from-home orders were lifted.
About 58% of the nation’s 320,000 sqm of gross supply additions in the second half of 2021 were in Melbourne, according to Colliers, but more modest levels are expected in the medium term. Colliers believes that only around half of the office project approvals fast-tracked during COVID are expected to proceed on time due to limited pre-commitment activity.
V-Leader approved permit includes a 2,000 sqm wellness facility, a 1,200 sqm sky lobby, gallery space and meeting facilities on levels 20 and 21. The tower will sit atop a large podium space, comprising 600 sqm floorplates for whole floor tenants whilst the podium entails floorplates up to 1,500 sqm.
The tower structure is aimed at a wide scope of tenants, including smaller-sized tenants looking for less space due to the hybrid working structure adopted by many post COVID.
“There’s been a huge shift in how people work and what tenants desire from an office space, as hybrid working is widely adopted tenants are now looking to empower and enhance their employee’s wellbeing through workplace experiences,” V-Leader’s managing director, Andy Zhang said.
“The new scheme signifies our confidence in a solely office development and is focused on delivering the benefits of a mixed-use scheme, through transformative commercial offices, ground floor retail amenity and a holistic wellness offering that has been designed to appeal to the next generation of CBD tenants.” he added.
Chicago-based architecture firm Skidmore, Owings & Merrill (SOM) are heading the design, working alongside Fender Katsalidis on the architecture and interiors.
A green column will be incorporated into the façade of the carbon-neutral building, alongside 24 terraced areas that will circulate fresh air throughout the building and create a permeable indoor and outdoor workplace. Terracotta fins will provide solar shading.
“600 Lonsdale’s biophilic, solar-responsive design signifies a new way of working; from extensive landscaped terraces to natural ventilation, this is a workplace that prioritises wellness and nature, and breathes with its city,” said Scott Duncan, design partner at SOM.
The project is set to launch in the September quarter, with construction commencing early in 2023.
V-Leader bought the site in May 2018 for $48 million through the purchase of most of the existing strata office building on the corner of King Street, and picked up the final strata unit in 2019 for $4 million.
