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John Holland helps Dexus kick off new Melbourne office tower

Diversified property group Dexus will kick off construction of a new $300 million office tower opposite Melbourne’s Federation Square.

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John Holland helps Dexus kick off new Melbourne office tower

By Simon Johanson9 March 2018 — 2:06pm

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Diversified property group Dexus will kick off construction of a new $300 million office tower opposite Melbourne’s Federation Square after securing construction firm John Holland as anchor tenant.

In a quid pro quo, the Chinese-backed John Holland will begin construction of the office at 180 Flinders Street this month before moving its staff into 7700 square metres of the complex after the expected completion date in 2020.

The 20,100 square metre office and retail development dubbed Flindersgate has largely flown under the property industry’s radar, overshadowed by a taller and more controversial project from Dexus for residential towers further along at 32 Flinders Street.

That twin tower project was approved at a reduced height, 47 and 14 levels, by planning minister Richard Wynne to prevent overshadowing of nearby Birrarung Marr park, a decision unsuccessfully appealed by Dexus at Victoria’s planning tribunal.

Dexus' new office building at 180 Flinders Street will feature large campus-style floorplates.

The towers at 32 Flinders Street will replace a 10-level, 530-space car park stretching half a city block to Flinders Lane behind.

In a similar vein, the Flindersgate project will partially replace and incorporate an existing multi-level car park on a 4,189 sq m half-city block almost immediately adjacent to the historic St Paul’s Cathedral.

The under-utilised site sits in a prime central city location within a short distance of Flinders Street station, an area set to be transformed by construction of the new $11 billion north-south rail tunnel.

Property records show the building was controlled by the National Mutual Property Trust, Deutsche Diversified Trust and the DB RREEF Trust before it was stapled together with two other listed trusts and some unlisted funds to form Dexus in 2004.

Dexus plans to build five levels of 2400 sq m campus-style floor plates using the air rights above the public car park and restore and refurbish two existing heritage offices on the site.

One of those heritage offices, the old Ball & Welch building fronts onto Flinders Street, and the other, an eight storey brick office next to the popular Adelphi Hotel, faces the city’s hippest street - Flinders Lane.

The campus-style floor plates, popular with large corporates and common in multiple new buildings in the city’s Dockland area, will be a first for a central city site.

Dexus head of development Paul Oates said the SJB Architect-designed 10-storey tower will include extensive refurbishment of the existing heritage offices which have views over Federation Square and the Botanic Gardens.

“A five-level atrium will bring natural light into the core of the building and our customers will benefit from enhanced amenity including a range of new retail and high-quality end-of-trip facilities,” he said.

The structure will step back, terrace-like, from Flinders Street.

The floorspace not taken by John Holland will be carved up into smaller sizes, as low as 500 sq m, to attract a diverse base of tenants, Mr Oates said.

John Holland general manager of building, David Lehmann, said the construction business was growing by 100 new employees every month, many of whom will be consolidated into the firm’s new headquarters at Flindersgate.

John Holland, previously owned by Spanish giant CIMIC, was sold three years ago to Chinese government controlled China Communications Construction Company which is listed on the Hong Kong stock exchange.

The new office may hit a sweet spot in the market in which CBD vacancy has tightened to a historic low of 4.6 per cent with rents growing.

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Simon Johanson

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Property Editor at The Age and BusinessDay journalist for Fairfax's theage.com.au, smh.com.au, watoday.com.au and brisbanetimes.com.au.

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