Chatswood office tower refurbishment to appeal to larger tenants

Property and investment group FKP will be seeking to fill a gap in the Sydney North Shore market as it undertakes a major refurbishment of its 15-storey office tower at 465 Victoria Avenue in Chatswood.

Marcus Pratley of Richardson & Wrench, co-leasing agent alongside Robert Gishen of Colliers, says he expects larger companies to jump at the opportunity, as there is a paucity of space that size between North Sydney and Chatswood.

“For corporates looking for 5,000 square metres and above there is nothing available. We expect the completed building to have major appeal to larger occupiers,” he says.

Each floor of the building will be modernised, and the 15,000 square metres of space refurbished to an A-grade standard. FKP’s construction team has been appointed to complete the refurbishment.

Net rent expectations for the refurbished building, which will commence in August and take 10 months to complete, are between $400 and $460 per square metre.

Floor plates in the building are about 985 square metres.

The modernisation will include the construction of a double-height foyer incorporating a lobby lounge and café.

It will have glazed facades, sculptural ceilings, a stone feature wall, lounge-style seating, a timber-paneled lift lobby and a floor of warm-toned limestone trimmed with stainless steel.
Uplighting will ensure the foyer will glow at night, enhancing the building’s street presence.

This lobby extension will create a prominent street presence, increasing connectivity to Victoria Avenue.

The foyer will flow into the outdoor retail area, which will be rejuvenated. It will have new shops, a rotunda, lawns and a dining precinct.

As part of the redevelopment the existing pedestrian bridge to the old railway station will be removed, and the entry on the corner of Railway and Brown streets will be given greater prominence.

The building and services upgrade is registered for a five-star National Australian Built Environment Rating System and four-star green star rating with sustainability upgrades to all floors maximising usable space and natural light.

FKP Property Group acquired Vero Tower, as it was then known in August 2007, for $98 million. The purchase price represented a price per square metre of $6,465 and initial passing yield of 7.2%.

The building first sold in 1998 for $78 million and then in 2004 for $86 million.

The A Grade building was purpose-built for insurance group Royal Sun Alliance in 1995.

The building is situated close to Chatswood Interchange, which services about 70,000 commuters per day as well as Willoughby Council’s $200 million entertainment quarter called The Concourse, which will open in September.

Suncorp, the former tenant, has already vacated the building.

Andrew Hall, FKP executive general manager commercial and industrial, says each floor can accommodate a workspace ratio of one employee per 10 square metres.

Office vacancies in Chatswood currently sit at about 20%, high compared with a national CBD vacancy rate of between 7% and 8%.