Charter Hall’s $450-million development in the Adelaide CBD will be home to Telstra after the telco signed to a 10-year agreement, further boosting confidence in the post-pandemic office market.
Telstra will occupy a significant slice of the planned 40,000sq m of office building at 60 King William Street after taking 6000sq m across two levels.
The 10-year agreement builds on Charter Hall’s long-term relationship with Telstra, including its global headquarters at 242 Exhibition Street in Melbourne, and at 275 George Street and 69 Ann Street in Brisbane.
Charter Hall office chief executive Carmel Hourigan said the new agreement at its premium-grade office development would notch up Telstra’s total leased space with the developer to more than 130,000sq m in Australia.
“[This agreement] underpins the strength of our partnership and reflects Charter Hall’s ability to deliver high quality, technology enabled buildings to meet the needs of Telstra’s business,” Hourigan said.
Construction, being overseen by Built, began in March and is scheduled to reach practical completion in mid-2023.
The development will be held across a partnership including Charter Hall Prime Office Fund, the Direct PFA Fund and through an institutional mandate with super fund investor VFMC.
Telstra, which was advised by Michael Greene of JLL, will relocate its Adelaide workforce once the development is completed in 2023.
It will join Services Australia after the federal government agency agreed to take 28,500sq m across 10 floors in the Cox Architecture-designed building earlier this year. More than 2200 Services Australia staff will relocate from four locations in 2023.
Charter Hall’s latest signing comes amid positive signs for the resurgent office sector with high-profile leasing agreements.
In Melbourne, Aware Super, which recently merged with VicSuper, will consolidate from three locations across the city into one, taking up 8000sq m at 555 Collins Street, a new $800-million office block also being developed by Charter Hall.
The under-construction tower is now 44 per cent pre-committed and is due to be completed by 2023.
Its anchor tenant is Amazon, whose commitment last year enabled Chart Hall to kick-start development of the first stage of a $1.5-billion, two-tower project.
GPT has also leased half of its 34,000sq m within its Queen & Collins complex in the Melbourne city centre after completing a $272-million redevelopment of the former global headquarters of ANZ Bank.
Meanwhile, global skincare brand Aesop has also signed up as a major tenant of a $95-million Collingwood office building being developed by Peregrine Projects.
In Sydney, ARA Australia, led by Edward Federman, has tied down the Department of Defence which plans to depart its existing digs at ISPT’s 270 Pitt Street.
The Department of Defence plans to take 18,000sq m at ARA’s newly renovated tower at 320 Pitt Street.
The 10-year term, brokered by JLL’s Alex Wong, Justin Hayes and Will Hamilton, represents the city’s largest existing-site leasing deal since 2019.