LEND Lease is set to launch a nine-level commercial building into a tight office market in Melbourne's Docklands after gaining planning approval on Tuesday.
The Bates Smart-designed complex called Y4 will sit on the Yarra riverfront at the end of Collins Street alongside another Lend Lease building, the 21-storey Y3 that is also looking for tenants before getting a green light for construction.
The new building at 875 Collins Street, split into two towers, will have a net lettable floor area of 34,000 square metres. It includes a five-star green design, rooftop garden with barbecue and views over the Yarra.
"The two-tower solution uses a centrally positioned split core to anchor each of the floors while providing opportunity for multi-tenancy occupation," the company said.
But Melbourne's office market vacancy rate has increased to its highest level in six years because of growing supply, the Property Council of Australia said last week. Over the next two years, a significant amount of space is due to come online, which is likely to push the CBD's current vacancy rate of 6.9 per cent higher.
A total of 190,481 sq m of new stock will become available this year, of which only 64 per cent is pre-committed, the PCA said.
Lend Lease is negotiating with potential tenants to fill the 39,191 sq m of net lettable area available in the neighbouring Y3 office tower.
Both Y4 and Y3 will have an end value in excess of $200 million.
The Denton Corker Marshall building received approval from Planning Minister Matthew Guy last year but its construction was dependent on securing tenants.
The rectangular building was oriented to reduce solar gain and maximise views and light, architects Denton Corker Marshall said.
Docklands has attracted such high-profile tenants as ANZ, Australian Taxation Office, Myer and NAB.