Cromwell Property Group and partner Blackrock have lodged new plans incorporating a third office tower into its $123 million project at Chatswood, in Sydney’s north.
The revised vision for the 475 Victoria Avenue precinct now includes an 11-storey tower. This will see floor space more than double from 3148 square metres to about 6500 sq m and will include a new entrance and outdoor space.
The 475 Victoria Avenue project currently comprises two 14-level office buildings with a total net lettable area of 22,000 sq m and a 4.5-star, 156-room hotel.
The expansion plans come as Cromwell is locked in a heated takeover battle with the Singapore-based ARA Asset Management led by chairman Dr Gary Weiss. Cromwell has told shareholders to vote against any move by Dr Weiss to gain a seat on the board and to reject the 92??-a share offer.
ARA is Cromwell’s largest single shareholder with 24 per cent and is looking to use the “creep” takeover laws to increase that to about 26 per ent.
Cromwell’s head of property Bobby Binning said the revised Chatswood DA builds on the original concept and includes a third office tower, plaza and amenity improvements to the common areas with the addition of new green space and dining options.
“COVID-19 and its impact on people’s travel to work has resulted in a rethinking of the modern workplace. The subsequent redesign of the end-of-trip facilities, heating, ventilation and air-conditioning (HVAC) system and office foyers have been based around key sustainability and hygiene considerations,” Mr Binning said.
He said the project will benefit from the planned Chatswood to Sydenham Metro Rail expansion due in 2024.
On the investment side, CI’s director of investment sales for North Sydney Chris Veitch said the impact of COVID-19 on commercial property occupation has focused buyer interest on suburban assets which are cost-effective and less affected by social distancing limitations on business.
He said suburban office buildings with plenty of car parking, offering comparatively low rents to office towers in the Sydney CBD, are an appealing proposition for tenants and investors.
“They offer tenants an accessible place to conduct their business, in whatever form that may need to be in the coming years and as the rents are low, occupiers can afford to take more space and retain flexibility,” Mr Veitch said.
The move to flexible office practices has also see a rise in demand for suburban precincts, as staff prefer to stay away from CBD areas, the latest CBRE market snapshot says.
Known as the ‘hub and spoke’ model it gives employees the choice to work from multiple locations and is predicted to drive a rise in interest in suburban locations, especially in Australia’s most populous cities of Sydney and Melbourne.
“Flex operators have the ability to provide the ‘spoke’, giving access to short or long-term space which offers a high level of amenity, particularly in suburban locations that were often given less consideration prior to COVID-19,” Mark Slater, head of CBRE Pacific’s advisory & transaction services – occupier business, said.
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