Charter Hall Secures AFP for 30-Year Lease at $1.3bn Wesley Place

Charter Hall has nabbed the Australian Federal Police to fill its entire 20-storey 140 Lonsdale Street office tower on an initial 30-year lease term.

More than 560 AFP workers will relocate from 383 La Trobe Street as the $300 million 140 Lonsdale Street reaches completion in late 2022.

The AFP Melbourne office will lease 22,750sq m of dedicated tenancy space along with 135 car parking spaces as part of the 30-year lease, which includes two additional five-year options.

The AFP Melbourne state office received parliamentary approval for $98.43 million of upgrades to the building and $63.43 million in landlord incentives as part of its agreement for lease with Charter Hall.

The AFP will join tenants AustralianSuper, Cbus and the Uniting Church in Charter Hall’s $1.3 billion Wesley Place precinct. The 110,000sq m Wesley Place—the largest office precinct in Melbourne’s CBD—is now almost fully-leased.

Melbourne CBD office vacancy remains the tightest in the country, with a 3.7 per cent vacancy rate and prime grade vacancy rates tightening to 2.1 per cent—the lowest level since 2008 according to JLL’s third quarter office market report.

By financial year 2022, as Charter Hall’s 140 Lonsdale tower reaches completion, stock will have increased 9.3 per cent—nearly double the rate of Sydney’s CBD.

Related: Developer ‘Accelerates’ CBD Towers to Meet 2022 Demand

The AFP’s new headquarters will face Little Lonsdale Street and Hayward Lane on Charter Hall’s 1.1-hectare Wesley Place site within the north-eastern core of Melbourne’s CBD.

The AFP ruled out Cbus Property’s 311 Spencer Street—set to house the Victorian Police headquarters—as part of its shortlisting process.

Building contractor Lendlease will integrate the upgrades and fit-out requirements during construction. The AFP will be responsible for building’s fit-out, establishing a project office on site to carry out the administration of the agreement for lease.

Charter Hall has amended the planning permit to fit the AFP’s design and upgrade requirements to the building. The building is due for completion in December 2022—the AFP’s lease expires at 383 La Trobe Street in the same month.

Work is due to kick off next month.