Brookfield, ISPT Complete $950m Bourke Street Skyscraper

Canadian asset management giant Brookfield and its co-investor ISPT have completed works on a $950-million commercial precinct in the heart of Melbourne’s CBD, just as the city prepares to be released from its sixth lockdown.

National Australia Bank will be the sole tenant at the 66,000sq m, A-grade office tower at 405 Bourke Street, which has the capacity to house more than 6000 workers within its new headquarters over a 12-year lease.

Work on the Woods Bagot-designed tower commenced in early 2018 and was scheduled for completion in the first quarter of this year.

Multiplex topped out the 40-storey development twelve months ago, however, delays due to numerous lockdowns limiting workforce on site meant completion had to be pushed back.

The building offers 2200sq m floor plates as well as a new retail laneway connecting Little Collins and Bourke Street.

Brookfield Properties project director Will Green said the building would be one of Australia’s most sustainable office buildings, targeting a 5 Star Green Star Office Design rating and a minimum 5 Star NABERS Energy Rating post completion.

“[405 Bourke Street] is a true engineering feat that Multiplex has achieved amid the on-going impact of the pandemic on construction in Victoria during the past 18 months,” Green said.

“This innovative project was achieved using a complex combination of freehold land, existing building structure and airspace rights.”

Industry superannuation fund-backed property manager ISPT acquired a half stake in the development in late 2017 with NAB a core customer of the company.

The funds manager owns NAB’s existing premises just up the road at 500 Bourke Street.

The new office tower will complement NAB’s existing sites, 700 and 800 Bourke Street, and will also consolidate Melbourne offices at 8 Exhibition Street, 101 Collins Street and 500 Bourke Street.

Melbourne’s CBD office market will now make its first tentative steps on the road to recovery after enduring a world record lockdown which has seen demand for office space drop sharply in the past six months.

Demand for space by prospective tenants in the Melbourne CBD dropped by more than twice as much as its previous largest six-monthly fall on record to minus 96,600 square metres.

Rents have effectively fallen as landlords and investors have upped incentives, rising past 40 per cent in some deals, in an attempt to lure tenants into empty space.

Additional supply flowing into the Melbourne market will tilt it further in favour of tenants.

Close to 400,000sq m of new space will be added in the next three years, double what is added to the Sydney market.