Charter Hall Group has scored another coup at its $1.3 billion Wesley Place office development in the Melbourne CBD – securing Australian Federal Police to all of an unbuilt 20-storey building.
AFP has signed for an initial 30 year term, with multiple options, for the 22,750 square metre complex to be known as 140 Lonsdale Street (artist’s impression, top).
Charter Hall said it has been working with the tenant for some time to design the “highest quality fit-for-purpose” headquarters.
The office will replace a multi-level car park – and be mostly exposed to Little Lonsdale Street.
Lendlease is expected to complete it by late 2022.
Charter Hall estimates it will then have an end value of about $300 million.
AFP has been based for years at 383 La Trobe Street – a seven level, 10,200 sqm office (pictured, below) which we reported last year sold to Mirvac for $122 million.
Mirvac immediately announced its intention to replace that building with an A-grade, 40,000 sqm commercial complex.
It was this year speculated AFP might relocate elsewhere in the city’s west end, possibly committing to space near Spencer Street, and an office Cbus Property is developing for Victoria Police, opposite the Melbourne Remand Centre.
However, Charter Hall managing director and group chief executive officer, David Harrison, said, his firm’s commitment to work with government customers, lured AFP east.
“We have worked closely with the AFP to design a bespoke property solution that will enable and support the AFP’s important work around national security, counter terrorism and continuing to make Australia a safer place,” Mr Harrison added.
Charter Hall’s regional development director, Simon Stockfeld, described receiving Parliamentary approval for AFP’s lease at 140 Lonsdale Street as “an important milestone”.
“We have worked collaboratively with the AFP to design its new purpose-built MSO, and we are looking forward to delivering one of the most advanced buildings in Melbourne that will integrate seamlessly into the wider Wesley Place precinct”.
Wesley Place is replacing land owned by the Uniting Church of Victoria, acquired in 2016 by Charter Hall via a 125-year lease.
Upon completion it will contain three offices including 130 Lonsdale Street where last December we reported another federal government organisation, the newly formed Australian Financial Complaints Authority, committed to 7600 sqm across four levels for an initial 12 year term.
In July, Australian Super committed to 16,200 sqm within the same building, which will also be occupied by Vanguard and the Uniting Church.
With the Australian Super lease, the 35-level, 60,000 sqm A-grade building (artist’s impression, right) was fully occupied, 10 months prior to practical completion.
Wesley Place will contain a total of 110,000 sqm of commercial space within two new skyscrapers (130 and 140 Lonsdale Street).
An existing office on the 1.1 hectare parcel making way for Wesley Place, 150 Lonsdale Street, is undergoing a major refurbishment as part of the redevelopment.
Charter Hall and the federal government are forming a stronger relationship
Charter Hall is landlord to several federal government agencies.
Last November, we reported it acquired two industrial properties leased to AFP, and occupied by Australian Border Force, for $118.5 million.
A month earlier, we reported Charter Hall paid a private investor $55 million for the Villawood, Sydney, commercial complex tenanted to the National Archives of Australia.
In 2017, the group’s Direct PFA Fund paid $58.6 million for a Forrest, Canberra, office predominantly leased to the Department of Foreign Affairs and Trade.
Charter Hall also actively pursues investments tenanted to state government arms, two of its funds recently picking up a Brisbane bus depot for $102.5 million. Its Melbourne CBD portfolio includes an office at 55 King Street part-tenanted to the Victorian Civil and Administrative Tribunal.
It also works with end-users in the social infrastructure field – last month announcing plans to develop a $350 million Innovation Quarter with Western Sydney University.