Sky-high cost for falling marble facade

Telstra is seeking nearly $500,000 in compensation from the owners of a building that dropped part of its marble facade onto a Melbourne city street in January.

Telstra is seeking nearly $500,000 in compensation from the owners of a building that dropped part of its marble facade onto a Melbourne city street in January.

TELSTRA is seeking nearly $500,000 in compensation from the owners of a building that dropped part of its marble facade onto a Melbourne city street in January.

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.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles