Big names may not have very far to look for a change of scenery

TWO large prospective tenants are believed to be looking for office space in Melbourne.

By InvestSMART · 28 Nov 2012

By InvestSMART ·
28 Nov 2012

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TWO large prospective tenants are believed to be looking for office space in Melbourne.

Professional services firm KPMG is seeking up to 35,000 square metres and electricity supplier AGL wants about 13,000 sq m, industry insiders say.

KPMG was looking at options as its office lease at 147 Collins Street was due to expire, a spokeswoman said.

Options did include staying at its present premises but no decision had been made, she said.

AGL would not comment on its requirements, but both it and KPMG may not have to look far.

Leighton Contractors will begin construction in the next few weeks on a 55,000 sq m office at 567 Collins Street, due for completion in 2015.

Leighton Properties entered into a contract to purchase the land, extinguishing a previous joint venture deal with APN.

Law firm Corrs Chambers Westgarth Legal will lease 8800 sq m of the 26-level tower between Spencer and King streets, with Leighton Construction itself also expected to take a significant proportion.

Three other premium grade buildings in Collins and Bourke streets are not yet fully leased, Colliers International data shows - 150 and 171 Collins and 720 Bourke between them have 39,000 sq m.

Another major construction, Cbus Property's new City West Police Complex on Spencer street, will be fully occupied once delivered in 2015.

Baulderstone, a division of Lend Lease, will construct the nine-floor complex that includes contemporary office space, a purpose-built police station and parking for 300 vehicles.

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Frequently Asked Questions about this Article…

Which big companies are reported to be looking for large office space in Melbourne?

Industry insiders in the article say professional services firm KPMG is seeking up to 35,000 square metres and electricity supplier AGL wants about 13,000 square metres of Melbourne office space.

How much office space is being built at 567 Collins Street and when will it be ready?

Leighton Contractors will begin construction on a 55,000 square metre office development at 567 Collins Street, with the project due for completion in 2015.

Does KPMG have to move from its current Melbourne office right away?

No — KPMG’s lease at 147 Collins Street was due to expire and the firm is exploring options. A spokeswoman said staying at its present premises was one option and no final decision had been made.

Which tenants have already committed to leasing space in the new Collins Street/Spencer Street developments?

The law firm Corrs Chambers Westgarth will lease about 8,800 square metres of a 26-level tower between Spencer and King streets, and Leighton Construction itself is expected to take a significant proportion of space in that development.

Are there other premium-grade buildings in the CBD with available space?

Yes. Colliers International data cited in the article shows three premium-grade buildings — 150 Collins, 171 Collins and 720 Bourke — together have about 39,000 square metres that are not yet fully leased.

What is the City West Police Complex project and who is building it?

Cbus Property is delivering a new City West Police Complex on Spencer Street, which Baulderstone (a division of Lend Lease) will construct. The nine-floor complex includes contemporary office space, a purpose-built police station and parking for 300 vehicles, and it is expected to be fully occupied once delivered in 2015.

How might these nearby developments affect where large tenants like KPMG and AGL choose to relocate?

The article suggests big tenants may not need to look far: new nearby supply such as the 55,000 sq m 567 Collins Street development, the 26-level tower between Spencer and King streets, and other projects could offer the large contiguous floorplates KPMG and AGL want.

What recent land deal changed the development plans for the Collins Street site?

Leighton Properties entered into a contract to purchase the land for the Collins Street development, extinguishing a previous joint-venture deal with APN, clearing the way for Leighton Contractors to start construction.