Billionaire Lang Walker Snares ATO as Docklands Tenant

THE Australian Taxation Office has pre-committed to an unbuilt 38,000 square metre office building in Melbourne's waterfront Docklands precinct.

Billionaire Sydney-based developer Lang Walker will build the $250 million office, which will be substantially bigger than the ATO's original 25,000 square metre requirement. The ATO also operates from offices at Casselden Place, expiring 2017, and La Trobe Street.

It's hoped the ATO building will start a development boom within the Village Docklands precinct, and within the wider Docklands area.

"Like any development, once you get something started...and with all the development down in the Docklands precinct now, the site is almost an infill site," Mr Walker told the AFR, which reported the deal. "The ATO [deal] will kick-start a lot more inquiry."

Mr Walker, who is developing Village Docklands with Asia's Kuok Group, is also set to develop a $95 million apartment building within the Docklands precincts, mostly of one-bedroom and studio apartments. The precinct will also include 136,000 square metres of office space.

Other major tenants in the Melbourne CBD and fringe leasing market at the moment include the National Australia Bank, for about 40,000 square metres, BHP Billiton (12,000 square metres) and Melbourne Water (10,000 square metres).

The ATO justified its move - which comes while it is still committed to leases for other office buildings - by saying"the cost of the lease is comparable with our current accommodation costs and relocation costs will be offset by the benefits of consolidating the four Melbourne-based sites into one."

Mr Walker is also negotiating to buy Amcor's outgoing Alphington paper mill in Melbourne's inner north-east, for a reported price of more than $100 million. That site is expected to be redeveloped into a $1 billion village.

In Canberra, Mr Walker is building a 40,000 square metre building for the Department of Education, Employment and Workplace Relations.