Shopping mall owner Vicinity Centres is planning to increase the size of its Chadstone shopping centre in Melbourne’s south-east, pushing ahead with development plans worth $685 million.
As part of its latest rounds of upgrades, which will include more than 1400 additional car spaces in two car parks and expansions to its dining and leisure precinct, Vicinity will break ground on a new entrance topped with a nine-storey commercial building.
The new $130-million office tower, to be known as One Middle Road, will comprise 20,000sq m of space and feature 2250sq m campus-style floor plates, 560 car park spaces, a sky garden and childcare facilities.
Vicinity chief development officer Carolyn Viney said the centre would address growing demand from commercial tenants wanting to be based at Chadstone.
Tenants in its current 33,000sq m of office space include major retailers Supre and Boost Juice.
“In 2020, we learned that for employers and employees alike, there are a range of benefits associated with working and playing closer to home, and One Middle Road reflects this trend,” Dare said.
“[The project will be an] energy efficient, state-of-the-art, campus-style office space and incorporates an outdoor sky garden—a first of its kind for office workers at Chadstone.”
Vicinity is targeteting a benchmark 5-star Green Energy rating and International Living Future Institute zero energy certification, in addition to encouraging sustainable commuting with “first-class” end of trip facilities.
The latest investment in the shopping centre comes as the mall, which already boasts three office towers and a five-star hotel, marks its 60th anniversary.
If the new plans are approved work could begin later this year 2021, with completion within four years.
The 240,000sq m shopping centre is currently the country’s largest shopping mall with more than 550 stores.
Before the pandemic, the mall typically received 24 million visitors annually with a daily full time-equivalent workforce of about 6000 people.
The value of Vicinity’s half-stake in Chadstone, which it owns alongside billionaire John Gandel, was cut by $64.3 million, or 2.1 per cent, to $3.02 billion.
Its Victorian malls have been under increasing strain due to multiple lockdowns and new property taxes.
The company announced earlier this week a preliminary net valuation decline of 1.2 per cent, or $164 million, for the six months ending June 30 for its 60 directly owned retail properties.
After posting a $242.8-million profit in the first half of 2020, the pandemic hit the company's bottom line, resulting in a net loss after tax of $394.1 million for first half of 2021.
Across its portfolio, only neighbourhood and outlets enjoyed valuation increases of 2.2 per cent and 1.6 per cent respectively.
Vicinity also saw rating action from Moody’s which had its A2 issuer rating affirmed and its outlook changed from “negative” to “stable”.
The valuations are subject to a final audit and the board’s consideration of its financial year annual results, which will be released on August 18.