Tall & Urban News

Canadian asset management giant Brookfield Properties has topped out its 405 Bourke Street development in central Melbourne on schedule despite a limited workforce on site during the height of the city’s lockdown.

Construction peaked at the mid-town site earlier this week, which has seen upwards of 6,000 workers from Multiplex on site since the project broke ground midway through 2018.

The A-grade office tower is already fully-leased with anchor tenant, the National Australia Bank, signing on prior to construction.

Brookfield project director Will Green said the topping out of the CBD tower represented the delivery of a complex development, completed during heavy restrictions on construction workforce during the city’s strict second lockdown.

“This milestone is made even more remarkable given the significant impact of the global pandemic we have experienced here in Victoria.

“At times lockdowns reduced our allowable on-site construction workforce to just 25 percent capacity,” Green said.

Super fund investor ISPT holds a half-stake in the AUD$800 million (US$578 million) project, which is built above three levels of retail, and located just one block down from the Bourke Street mall.

Designed by Woods Bagot, the building will have 2,200-square-meter floor plates and will target a 5 Star Green Star Office Design rating and a minimum 5 Star NABERS Energy Rating post completion.

National Australia Bank will take the entire office space of 66,000 square meters and is expected to move from the ISPT-owned 500 Bourke Street, where staff have been consolidated during the pandemic, around August next year.

NAB head of property Kevin Davine said the building’s design would cater to the bank’s adaptability and organization needs post-pandemic.

“Covid-19 has challenged us all to think, work and act differently and we want to ensure that we retain the best of what we’ve learnt – and get back to something even better.

“We have every confidence our people will love the new workspace and once Covid restrictions ease, enjoy being in the heart of Melbourne’s CBD,” Davine said.

Brookfield will take solace from its early agreement with NAB, with business confidence continuing to be blunted by uncertainty during the pandemic, which has seen demand for office space falter.

In Melbourne, the vacancy rate has risen to 11.3 percent, from a low of 3.4 percent in the first quarter.

As a result, net effective rents—which factor in the value of incentives—are falling across the city.

Total vacant space available for occupancy over the next three years is also expected to tip 235,000 square meters, including new and backfill space.

Brookfield, which has about AUD$190 billion (US$137 billion) of real estate assets under management globally, has been active here since 2007 but has ramped up activity and last year transacted AUD$5.8 billion (US$4.1 billion) of real estate, AUD$3.5 billion (US$2.5 billion) of which were acquisitions.

In Australia its real estate business has AUD$14.8 billion (US$10.7 billion) of assets under management—5 percent of global investments—with a focus mostly on commercial development.

Brookfield has about 20 office assets around the country and three active development sites including a recently topped out AUD$2 billion (US$1.4 billion) project at Wynyard Place in Sydney and the recently announced US$800 million (US$578 million) Chevron headquarters in Perth.

For more on this story, go to The Urban Developer.