Government aims to move into Dexus' ultra-green 1 Bligh Street

Government aims to move into Dexus' ultra-green 1 Bligh Street
Government aims to move into Dexus' ultra-green 1 Bligh Street

Just three months after Julia Gillard cut the ribbon at the opening of 1 Bligh Street, it’s now been confirmed that the federal government intends to relocate the Commonwealth offices into the newly completed green-star office building.

The move has been confirmed by the Special Minister of State, Gary Gray, who will shortly sign off on the lease for the Bligh Street address.

It will bring an end to the nearby occupancy of the Phillip Street offices, which dates back to the Hawke government occupancy.

Gray said in a statement that the government had outgrown the Phillip Street location.

The Sydney Commonwealth Parliament Offices are currently located at 70 Phillip Street, providing office and meeting facilities for the Prime Minister and Cabinet, office-holders and visiting senators and members of the House of Representatives.

''It has become clear that the existing premises are not capable of serving the needs of senators and members into the future,'' he said.

Over the past 15 months, the Department of Finance and Deregulation has been managing a search for alternative premises and a number of prospective tenancies have been considered. 

It's not a done deal but 1 Bligh Street has been selected as the preferred tenancy. 

“The actual term of the lease and costs involved are still being negotiated,” Gray says. 

Subject to due diligence processes, and the obtaining of necessary Public Works Committee approval and the negotiation of appropriate leasing arrangements, the relocation to 1 Bligh St will take place in 2012.

It is expected the Commonwealth offices will be located at 1 Bligh Street for at least similar 25 year plus tenancy to the current location.

Gray says the move would deliver operational savings through the building's six-star green star energy rating.  Its features include water recycling measures, which reduce mains water usage by up to 90%; building design and features such as the double-skin façade and sun-shading, which reduce air-conditioning energy consumption by up to 50%; and a 42% CO2 reduction when compared with similar sized conventional office towers. 

“The Phillip Street building, even if it were renovated, has inherent negative features in relation to access and egress, security, parking and flexibility. There’s also very little flexibility in floor plans, limited information and communications technology capabilities and it cannot provide live broadcasts directly from the premises,” Gray noted.

The property is currently about half-tenanted, and recently Bank of America Merrill Lynch analyst Simon Garing said it would take developer Dexus four years to fully lease the space.

Dexus shareholders have been advised the newly completed 1 Bligh Street Sydney could be 67% leased by Christmas 2011.

“We expect to execute a lease in respect of three floors prior to Christmas, which will increase the percentage leased on the building to 67%,”  Victor Hoog Antink, Dexus chief executive officer told the annual general meeting.

It is understood to be the government leasing deal.

“We are targeting to be 80% leased by June 2012,” he anticipated. 

It was Dexus’ seventh annual general meeting since stapling in 2004.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.


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