The developer is confident there is opportunity in the office market shakeout, as blue chip tenants chase high-quality workspace for their employees.
Already a subscriber?Industry super fund developer Cbus Property is going full steam ahead building a $1 billion tower Melbourne CBD tower with less than one third of its space pre-committed, confident that it will have few competitors for corporate tenants when completed at the end of 2026.which is taking 15,000 sq m, while law firm Baker McKenzie has just signed on for 3600 sq m.
“The logic behind it is that there is nothing else coming out of the ground by the time we are finished. The competition is very minimal, if any,” Cbus property chief executive Adrian Pozzo toldCbus Property is the development arm of the $85 billion industry fund which holds retirement savings for construction workers, employees in manufacturing, the media and elsewhere. Its property arm had a $6.
The Cbus Property chief hopes that “flight to quality” weighs in favour of a new building such as that at 435 Bourke Street, which among other thingsA key metric for developers, especially pertinent in a weak office market, is their ability to let space at economic rents, covering the cost of the building. For Cbus Property, building costs were locked in before construction inflation took off, giving it a better chance of securing those economic rents, even as the leasing market softened.
Cbus Property is in talks with at least six tenants who would account for 90 per cent of the space. But even if only half of them sign on, 50-60 per cent of the building will be leased, according to Mr Pozzo.
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