ISPT is spending more than $300,000 a month to secure the crumbling facade of 447 Collins Street, with the developer claiming it will be forced to outlay at least that much every month until the building is demolished.
The 20-storey office and retail centre has become a significant financial drain for the super fund-backed group since a slab of marble on its facing plunged into the plaza below in January 2012, forcing the building's evacuation and closure.
Since the incident, the forecourt has been sealed off while the facade has been secured, stripped away and replaced with aluminium cladding at a cost of more than $13 million. This estimate does not include lost rental income on its 30,183 square metres of lettable area.
"Ongoing costs are likely to be in the order of $300,000 per month until such time as the building can be demolished," according to planning documents.
In April, ISPT applied to the Melbourne City Council for a permit to demolish the 1964 "internationalist style" building and plaza, citing a combination of structural and public safety considerations.
"ISPT has concluded the base structure of the existing office building is not suited for refurbishment to meet current day corporate office requirements," the group's planning application says.
"ISPT's priority for an outcome prioritising public and private safety has left ISPT with no viable option other than the full demolition of the existing office tower and a subsequent full redevelopment of the site."
The demolition application also signals the end of a long-running plan to build an 11-storey office tower and two-storey retail "icon" building on the existing forecourt, which was granted planning approval in 2006.
To date, ISPT has not submitted plans to replace 447 Collins Street, but it may turn the 6400 sq m site - about half a city block - into a public space in the interim.
The demolition is expected to cost $18 million and take nine months to complete. ISPT bought the property for $81 million in 2004.
The heritage status of the property also remains a potential obstacle to its redevelopment. Earlier this year, Planning Minister Matthew Guy assigned heritage protection to 87 city buildings and referred another 10 - including 447 Collins Street - for further review.
A spokesman for Mr Guy said no decision had yet been made about those 10 buildings.
ISPT chief executive Daryl Browning did not respond to a request for comment.