QBE has signed an 11-year agreement to occupy nine floors of the 388 George Street tower under refurbishment in Sydney CBD.

The global insurance group will take up more than 11,950sq m under the lease agreement as an anchor tenant, and will join First State Super at the office tower who signed on last week.

The 28-level tower, on the corner of George and King Street, offers approximately 35,000sq m of net lettable area, and is jointly owned by Brookfield Properties and Oxford Property Partners.

The leasing deal comes as Sydney and Melbourne office market vacancy rates edge toward record lows.

The George Street tower is currently undergoing a $70 million refurbishment after plans were lodged to the City of Sydney by skyscraper’s owners in May last year.

Upgrades include a five-storey retail and commercial addition, extensive on-floor works, upgrades to the lifts and end of trip facilities, as well as new and expanded ground floor retail.

QBE Australia Pacific chief executive Vivek Bhatia said the group has developed a “detailed approach” to its property strategy “to ensure it aligns with our future-focused agenda”.

“It allows for changes in workplace practices, support of multiple working styles, such as flexibility and collaboration, and will improve the employee experience with a focus on wellbeing,” Bhatia said.

“The changes also offer QBE an opportunity to reduce costs by improving the efficiency of the space it occupies.”

QBE will also be a major tenant at GPT’s $300 million Smith Street tower in Parramatta. GPT broke ground on the new Fender Katsalidis office tower in March this year.

The George Street A-Grade tower is targeting a 5 Star NABERS Energy rating and a 4 Star NABERS Water rating.

The existing building – formerly known as King George Tower – was designed by Australian architect John Andrews in 1976, and stands at a 45-degree angle.

Works to the site are expected to be completed in 2020, with QBE relocating to the newly-renovated site in December 2020.