Sky-high cost for falling marble facade

Telstra was forced to clear its 462 staff out of offices at 447 Collins Street, and claims it spent $304,642 on temporary leases and wages for staff who were unable to work.

It is seeking a further $170,000 in costs to speed up refurbishment of new office facilities for its staff, according to documents filed with the Supreme Court of Victoria.

"We look forward to the matter been resolved in court," a spokesman said.

The property carrying the Suncorp name is owned by Industry Super Property Trust and is covered in scaffolding. Melbourne City Council issued an emergency order after a marble sheet fell off the building on January 30. About 40 per cent of the facade is now clamped to the building to avoid further shedding.

ISPT will not renew leases and remaining tenants will gradually vacate over the next year. Telstra was already planning to move to a new building in La Trobe Street. Suncorp is expected to be the last to leave, in mid-2013.

"At this stage the intention is to keep the building," ISPT chief executive Daryl Browning told BusinessDay. "The floors that are vacated will not be reoccupied because the work that would be needed on the facade is likely to be disruptive to tenants. The certainty is it would be easier to conduct the work with an empty building, whatever the work may be."

Mr Browning said that no more damage had occurred since January, including when Melbourne was struck by an earthquake on Tuesday night.

While shops and cafes in the bottom of the building that were forced to close were in talks for compensation, Telstra was the only tenant to sue for compensation so far, Mr Browning said. A hearing is set for this morning in Melbourne.

ISPT bought the building from AXA Asia Pacific in November 2004 for a reported $81 million. It values 447 Collins Street at $50-$99 million, according to its latest annual report. ISPT was founded in 1994 and manages $7 billion worth of property owned by 23 superannuation funds. SunCorp plans to move 750 staff out of the building in 2013.