Amazon has committed to 31 per cent of an office about to start construction at 555 Collins Street, in Melbourne’s Western Core.
The 15,000 square metre deal within the 34 storey building at the south-west corner of King St, will see the occupier relocate its local headquarters from The GPT Group’s 8 Exhibition St at the east end of town.
It is unknown what rent and initial term the tenant and its next landlord, Charter Hall, have agreed; JLL’s James Palmer represented the latter.
The asset will be held by Charter Hall Prime Office Fund (CPOF), which in the city is completing Wesley Place, a $1.55 billion office compound where the Australian Federal Police, Australian Financial Complaints Authority, Australian Super, Telstra Super and Cbus Super, also agreed to spaces prior to, or during the construction phase.
For 85 years before 1973, 555 Collins St accommodated the William Pitt designed Federal Coffee Palace.
The state government replaced it with Enterprise House – a 24-level office renowned in agency circles for its spectacular views.
In 2013, local private investor Harry Stamoulis earmarked the parcel for an 82 floor mixed use but predominantly residential and hotel complex – but a year later, sold it Fragrance Group, which was only approved for 47 storeys.
The property was listed for public sale in late 2018 – Charter Hall picking it up for $140m.
The landlord owns the neighbouring low-rise office (55 King St), and last year proposed a $750m two-tower project for the combined 4620 sqm holding – which the Victorian government approved in April as part of its Building Recovery Taskforce initiative.
The investment house also recently branded the amalgamation: 555.
As part of a second stage, a 28 level commercial investment will be constructed south of the 48,000 sqm Amazon-backed asset.
Amazon expanding in Melbourne
Amazon arrived in Australia three years ago with the lease of an ex-Bunnings distribution centre in Melbourne’s Dandenong South (story continues below).
Last month it pre-committed to another, measuring 37,000 sqm, in the city’s west Ravenhall, which will be held by Dexus.
During the COVID lockdown the Seattle based business rented a landmark 200,000 automated factory to be constructed at Sydney’s west Kemps Creek – which Goodman owns.
Charter Hall goes Premium-grade for 555 first stage
Amazon’s office will be rated Premium; which is atypical for 2020 (most of the highest quality new Melbourne CBD proposals have been Prime which is a combination of Premium and A-grade).
The tower will include 2300 sqm floor plates and sit over a multi-floor retail complex.
The address is opposite Rialto Towers, which Dexus and GIC co-own with Grollo Group following a $644m outlay for a 50pc stake last year.
“555 Collins St is a visionary commercial precinct that will create a new benchmark for office development in Australia,” Charter Hall Group chief executive officer and managing director, David Harrison, said.
“We expect a flight to high quality modern office buildings as tenant customers refine their workplace to meet the changing appetite for modern, technology and health/hygiene driven accommodation requirements”.
Charter Hall Office chief executive officer Carmel Hourigan added the two-tower development will be transformative for the precinct – which since the advent of Docklands is considered by some the centre of town, moreso than its west.
It will include technologies such as touchless amenities, occupant-only apps and the ability to call a lift specifically to a floor.
Since inception the manager has built office stock worth $10b.
“We are delighted that we have secured one of the world’s leading technology companies to 555 Collins St and look forward to this new Premium grade…tower attracting further office customers,” Ms Hourigan said of the deal.
CPOF, which will be worth $8b once it completes its development pipeline, has an eight year Weighted Average Lease Expiry.