Tenants yet to get compensation guidance after emergency closure of Collins Street office building

The safety cordon around the 1960s office block at 447 Collins Street remains in place as owner Industry Superannuation Property Trust’s engineers undertake safety assessments and remove loose panels, and tenants in the building are yet to find out what they will receive for lost income.

The Godfrey & Spowers-designed building was cordoned off last week after a two-metre-by-one-metre marble panel became dislodged and plummeted into the courtyard – a popular lunchspot for nearby office workers. No one was injured.

The panel, one of a reported 1,200 that coat the building, likely fell due to a combination of age and weather, according to a Melbourne City Council spokesperson.

“The panels are fixed to the building using a combination of mechanical fixings to support the load and an adhesive to keep the panel in position.”

“It appears that over time the adhesive has permitted sufficient movement so as to allow the panel to move beyond the safe limit of the mechanical support.”

ISPT chief executive Daryl Browning says the weather could have affected the adhesive.

“Just as windows can break, adhesions or fixings can be affected by weather, extreme weather. There could be some breakdown in the metal or the adhesive. It unfortunately does happen.”

“The reality is there are not that many failures. In my working career there have been a few buildings ... that have had facade issues.”

Since 2006 ISPT has had approval to build a Buchan Group-designed 11-storey office block and a two-storey restaurant on the site. The permit was extended in September and is due to expire in December 2015. However, the building was recommended for heritage protection in July 2011 by Melbourne City Council.

ISPT has contested the decision, arguing “the condition of the existing building means it is not feasible to retain the existing building in its current form”, according to a December Melbourne City Council document.

The inclusion in a heritage overlay would affect future approvals if the owners were to allow the current approval for plans to lapse.

There are currently no specific regulations requiring owners to periodically maintain facades, however ISPT did undertake inspections in 2011, according to the council spokesman.

“The owner had engaged a contractor to do some facade inspections late last year. The extent of these inspections is unclear, and it is understood that there was no cause for concern at that time.”

The safety cordon extends approximately 30 metres from the north (Collins Street) side of the building; however on the western (William Street) side the cordon is only the width of the pavement, although the council says the panel fell several metres from the building.

“The panel hit the balustrade on the level below and was then propelled away from the facade. It appears the main impact area was a few metres from the face of the building,” says the council spokesman.

“The areas that have been barricaded are similar to those that would be protected by a gantry if the building was under construction.”

The cordon has forced many ground-floor retail businesses to close. The owner of one business says the building’s owners have been unwilling to discuss compensation for lost business.

“We've been waiting for three or four days and we've still heard nothing. I think there’ll be a meeting [on Friday].” says one business owner.

“There will certainly be a discussion... They obviously have had to close and there’ll be income that they’ve forgone. And that will all be considered,” Browning says.

Managing agent Knight Frank was recently offering space for lease in the building but the lease sign at the front was taken down mid-week.

ISPT is one of the largest property funds in Australia, managing $7 billion of investments. In Melbourne it owns 500 Bourke Street, Casselden Place, 114 William Street, Melbourne GPO, 474 St Kilda Road and 50 Lonsdale Street.

ISPT bought 447 Collins Street for $81 million from AXA in November 2004.

On February 10 ISPT met with business owners , who say compensation matters have been discussed. The meeting was 11 days after the January 31 incident.