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Foxtel’s former Melbourne office has found a new leasee in the federal government, but the building will undergo a transformation before the new tenants move in.
The Commonwealth has agreed to take a 12 year lease on office space in the building at 1 Dean Street, Moonee Ponds in Melbourne’s inner north-west, which is an asset of Charter Hall.
The investment group has agreed to significant upgrades of the four-story, 7,104 square metre building that sits on a 6,641 square metre site prior to its new occupancy.
The reno will see the office block achieve a minimum 4.5 Star NABERS Energy Rating with the installation of over 280 solar panels, while creating a contemporary ground floor lobby design, cafe and arrival experience. New landscaping will be added along with end-of-trip facilities to encourage workers undertaking physically active commutes.
In keeping with the fund’s eye towards sustainability, comprehensive waste management practices are slated to be used throughout the redevelopment and office fit-out, with outgoing resources diverted from landfill.
The new lease follows the departure of Foxtel from the building that once housed its national customer solutions centre and was purpose built for the cable provider in 2004. It came into the hands of Charter Hall in 2012 when the group agreed to take over as the responsible entity of the $444.5 million PFA Diversified Property Trust, assuming the role from Brisbane-based APGF Management.
PFA Diversified Property Trust has owned the property since 2007, when it completed a deal with Trinity to sell a holding at 388 Queen Street, Brisbane, for $40.0 million, while at the same time acquiring the Foxtel building for $28.50 million.
At the time of the deal, Foxtel had 10 years remaining on its lease through to March 2017, with three four-year options to renew.
The TV provider was roughly a year into its recently-renewed lease when Charter Hall floated the property for sale in April 2018. At the time, any transaction was predicted to value the property at approximately $45 million. The group retained the property, with Foxtel evidently not renewing through its full options cycle.
Charter Hall Direct Fund Manager, Julian Menegazzo, said the group was excited to welcome its new tenants after the renovation of the building is complete in August 2022.
“We are thrilled to be providing the Commonwealth with a new, state-of-the-art, premium office space at 1 Dean Street, previously known as the ‘Foxtel Building’. This agreement will see 75 per cent of the property leased prior to Foxtel’s departure and with significant upgrades, this building will be even more attractive to other tenant customers,” Mr Menegazzo said.
Steven Bennett, Charter Hall Direct CEO, said the new lease was directly in line with the fund’s focus on “high quality office buildings underpinned by strong tenant covenants with government or well-regarded corporate tenants.”
“We are pleased to welcome the Commonwealth to PFA through this strategic lease agreement, which builds on our commitment to sustainability and enhances PFA to over $2.4 billion in funds under management,” Mr Bennett said.
He added the new deal meant that over 60 per cent of the fund’s income profile was now secured by Australian government tenants.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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