Investa has been greenlit for its twin 28-storey office project in Melbourne’s CBD.
The tower, planned for a 3196sq m site at 522-552 Flinders Lane, was approved by Victorian planning minister Sonja Kilkenny and work is now expected to commence in the third quarter of next year
The project comprises two towers on a shared podium. It will deliver a total of 40,695sq m of open plan office space and 688sq m of co-working space.
The Hassell Architects-designed towers incorporate end-of-trip facilities, a rooftop terrace, retail tenancies, and basement car and bicycle parking spaces.
The development, which Investa applied for via its company ICPF Nominees, was queried by the City of Melbourne went it came before the city at its April 9 meeting due to the requirement of demolishing a 1000-space carpark. It was, however, by the Future Melbourne Committee at that meeting, with the final approval granted by the minister last month.
The project has an estimated construction cost of $332 million and is expected to be completed in the second half of 2027.
An Investa spokesperson said that the approval for 522 Flinders Street, adds to its future development pipeline beyond current projects such as 39 Martin Place, Sydney (due for completion in 2024), Parkline Place, Sydney (due for completion in 2024) and 360 Queen St, Brisbane (due for completion in 2025).
The towers will add to the limited office supply pipeline, with only around 169,000sq m anticipated to enter the Melbourne CBD market during the next three years, Colliers associate director of research Jonathan Mayes said.
“Opportunities for premium-quality stock within the eastern CBD precinct is becoming increasingly tight with market pressures likely to extend further west.” Mayes said.
According to seasoned workplace designer Domino Risch, office tenants want flexibility, including the option to use co-working space to manage fluctuating headcounts and access amenities including theatres and conference areas as required.
“Landlords need to think of selling space as a service (SAAS), as opposed to just providing buildings.” Risch, a director at Placeology, said.
Offices also need to facilitate connection across businesses within a hub or ecosystem, as is the case for Sydney’s Tech Central, Risch.
More appealing offices in better locations reap the rewards of higher returns, with prime net face rents across the Melbourne CBD increasing by 1.9 per cent through the June quarter, reaching an average of $775 per square metre per annum, Mayes said.
“There has been an increased centralisation thematic across the market, with a higher expression of interest from tenants relocating into the CBD.” He said.
“Recent movers include David Jones, Foxtel, Flight Centre, Becca, Costa and Wesfarmers Health.”
The outlook for the Melbourne CBD is positive as it continues to rebound, Colliers national director of office leasing Andrew Beasley said.
“Through 2024 there has been an influx of tenant requirements in the market providing confidence that conditions are set to continue to improve across the CBD,” Beasley told The Urban Developer.
The Flinders Lane area is currently being revitalised with two hotel redevelopments under way on nearby Spencer Street—the Sir Charles Hotham Hotel and the Batman on Hill Hotel.
And Grollo Group is looking for a joint-venture partner to develop its site comprising four buildings on King Street between Collins Street and Flinders Lane.
