Telstra seeks pay back after facade tumbles

TELSTRA is seeking nearly half a million dollars 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 half a million dollars 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 staff out of offices at 447 Collins Street and claims it spent $304,642 on temporary leases and wages for staff that 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.

The property carrying the Suncorp name is owned by Industry Super Property Trust and is currently 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 damage.

ISPT will not renew leases and remaining tenants will gradually clear out over the next year. Telstra was already planning to move its staff to a new building on La Trobe Street.

"At this stage the intention is to keep the building," the chief executive of ISPT, Daryl Browning, told BusinessDay. "The floors that are vacated will not be re-occupied 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."

No more damage has occurred since January, Mr Browning said.

While shops and cafes in the bottom of the building that were forced to close are in talks for compensation, Telstra is the only tenant to sue for compensation so far, Mr Browning said. A hearing is set for tomorrow 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 between $50 million and $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, which is a resident in the building, plans to move 750 staff out of it next year.

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