Cbus Property gets nod for $1b Melbourne office tower

Cbus Property can push ahead with developing a new $1 billion office tower in central Melbourne after the Victorian government approved the pared-back 49-storey building on the corner of Bourke and Queen Streets.

The 59,000sq m commercial building is one of the first to be approved under the Victorian government’s so-called C270 rules governing site density and setbacks, implemented to limit residential development in the city centre.

These new regulations have resulted in a tower design utilising smaller floorplates, the biggest of which will be 1700sq m at lower levels. The floorplates would shrink to 1300sq m higher up in the tower, excluding banks as tenants.

However, Cbus Property chief executive Adrian Pozzo said that made the tower available to a wide range of employers, including legal firms, wanting between 3000sq m and 5000sq m.

“There are so many different tenant requirements out there,” Mr Pozzo told The Australian Financial Review on Tuesday.

“The tenant market is forever changing. Not long ago we were talking of [an office space ratio of] 1:12 [square metres per worker]. Now it’s 1:10.

“The work environment is continually changing and we’ve got to continually change with it to come to grips with it and to develop new products for it.”

A year ago, Victorian Planning Minister Richard Wynne flagged easing the planning controls, but nothing has happened.

“We’re working with the Property Council to better understand industry concerns, make changes to address any inconsistencies and provide greater clarity to the planning control,” Mr Wynne told the Financial Review on Tuesday.

The Property Council’s Victorian executive director Cressida Wall said reforms were urgently needed.

“We are disappointed at the speed at which this has been reviewed,” Ms Wall said.

Cbus Property was looking for smaller, boutique tenants looking to carve out space by creating connections between different levels, Mr Pozzo said.

The Bates Smart-designed building will house a four-level wellness hub and provide parking for 600 bikes. That emphasis on wellness would allow smaller employers to offer a level of amenity to their workers that smaller tenants could often not provide, Mr Pozzo said.

“They’ve got to keep their staff now, also,” he said.

“They’re getting their mind around holding onto people and what are they offering employees.”

City of Melbourne planning officials gave the downsized building, originally intended to have 58 storeys, their approval in October.

The developer got the state government’s nod two days before Christmas and is now tendering for demolition of existing buildings on the site, which covers four separate addresses. It hopes to start construction by the end of this year and complete the 59,000sq m tower in mid-2023.

Cbus Propertycombined neighbouring properties into a single super-site after their Singaporean owners put aside a lengthy property dispute over their own proposals and offered the real estate to the market.

-21/01/2020  Australian Financial Review Michael Bleby

6th February 2020

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