The newly-created Australian Financial Complaints Authority has secured its first digs at Charter Hall’s $700 million Wesley Place, taking 7,600sq m at 130 Lonsdale Street in Melbourne’s CBD.
AFCA has signed a 12-year lease, joining Vanguard, Telstra Super and Cbus Super as tenants and taking the Charter Hall Prime Office Fund-owned tower’s pre-committed NLA to 78 per cent.
With limited new development supply in the medium term, vacancy rates have tightened to 1.6 per cent in the city’s eastern end, according to JLL figures quoted by Charter Hall.
“Leasing conditions will remain very tight for another 18 months at the top end of town until 89 Collins Street and Wesley Place reach practical completion,” JLL Victoria head of office leasing Colquhoun said.
“Most pre-lease tenants for these two developments, including Macquarie Bank, McKinsey & Co, Cbus and Telstra Super, will be upgrading from buildings within the area.”
Already at 10-year lows, Melbourne's prime office market vacancy rate could shrink below the 3 per cent mark on the release of second half results next year – increasing to be in the region of 5.5 per cent by mid-2020.
Charter Hall’s total investment in the Wesley Place precinct, including the towers at 130, 140 and 150 Lonsdale Street, is expected to rise to more than $1.3 billion on completion.
“This new lease demonstrates our approach to securing significant tenant pre-commitments to de-risk the approximately $1.3 billion of committed projects that we have under way nationally within our office funds management platform,” Charter Hall Prime Office Fund manager Matthew Brown said.
The financial complaints authority will take “skyrise” levels 24 to 27 of the tower, with its 12-year lease set to commence in line with practical completion of the 35-storey tower in mid-2020.
The Australian Financial Complaints Authority came into force as of 1 November 2018, and was flooded with more than 6,500 complaints in its first month of existence – a nearly 50 per cent increase compared to complaints filed with its predecessors.
Colliers national director Tim Farley represented AFCA in brokering the deal.