Charter Hall has secured approval for a sizeable commercial development in Melbourne’s recovering CBD.
The 1700sq m corner site, an amalgamation of 572-574 Lonsdale Street and neighbouring sites at 256-260 King Street and 248-250 King Street, will be combined in order to deliver a 22-storey A-grade commercial building.
The office development at the west end of the CBD, to be known as 580 Lonsdale Street, was unanimously approved by the Future Melbourne Committee and will now go before planning minister Richard Wynne.
The development will deliver 24,000sq m of net lettable area and will feature 800sq m of ground floor retail above three levels of basement car parking, providing 57 spaces, as well as end-of-trip facilities for 128 bicycle commuters.
The tower, designed by Cox Architecture, will offer tenants large floor plates, ranging from 1208sq m to 1409 square metres.
Council signed off on the office project on Tuesday after a two-year application process.
Charter Hall plans to retain and protect the front portion of the Kilkenny Inn on the corner of Lonsdale Street and King Street. According to the architectural plans the new commercial building will be setback from the state-significant building by seven metres.
“This a very high quality proposal and the Kilkenny Inn, which is a significant heritage-listed building, now has a much more significant setback and is now treated with a lot more dignity than the first Iteration of plans,” councillor Rohan Leppert said.
“The [new] plans are a testament to the rigour and the quality of the process that [Charter Hall] has undertaken, however, as part of these plans Paramount House will be lost.”
The historic bluestone Gough Alley, behind the Kilkenny Inn and serves as a back entrance to the site, will be retained, running through the core of the new commercial building.
“The site is located on a very important intersection for our city and and for many years this intersection has unofficially be known as an intersection of sleaze,” deputy lord mayor Nicolas Reece said.
“Over the next couple of years, led by this landmark development dare I say, we’re going to see a real transformation of this intersection and this part of the city which will be a fantastic outcome for Melbourne.”
The development will also be located in Melbourne’s prime commercial district, capitalising on its reputation as the city’s legal precinct.
At a neighbouring site, developer V-Leader has approval for a similarly positioned 42-storey office tower.
The $500-million building, which will be constructed on an adjacent corner of Lonsdale and King streets, is set to comprise a 280-key boutique hotel and 24,400sq m of A-grade office space.
V-Leader secured the existing 600 Lonsdale building in May 2018 after 15 strata owners sold their share in the building for $48 million. A total of $52m was paid for the Lonsdale Court building after the final strata owner moved to sell a year later.
At 380 Lonsdale Street, developer Brady Group is close to completing a $500-million residential project, its largest development to date, which features two towers rising 52 and 68 levels comprising 700 apartments.
Easing concerns about Covid-19 has done little to lure workers away from their home offices and back to the workplace in Melbourne—which experienced one of the toughest and longest lockdowns in the world last year.
Three in four city workers remain reluctant to return to their workplace full time, according to a Roy Morgan poll recently commissioned by the City of Melbourne.
More than 30 per cent of people would like to work mostly from home and more than 40 per cent would like regular days at home, its analysis shows.
Despite this, demand for prime office space has continued to flow from smaller companies looking to upgrade in the weakened market, looking for high-quality offerings at 500sq m or less.
CBRE anticipates prime office vacancy rates in Melbourne, now at 11.3 per cent, will by 2024, tighten to 8 per cent.