Property fund manager Charter Hall has moved to overhaul the third and final leg in its $1.3 billion Wesley Place project on Melbourne’s Lonsdale Street by constructing a new six-level podium for an existing building within the precinct.
The development application for 150 Lonsdale Street will rework the building – an established property in a precinct Charter Hall patiently assembled over several years at the eastern end of the CBD – and integrate it with the two new developments the fund manager is pursuing in the neighbourhood.
Those neighbouring buildings include 130 Lonsdale Street, a new office tower still being constructed which topped out earlier this month, and which Charter Hall has developed through a 125-year leasehold deal on land owned by the Uniting Church.
Between 150 and 130 Lonsdale Street is a group of properties held by the Uniting Church, including the Wesley Church, the manse, schoolhouse and caretaker’s cottage, all historic buildings in the neo-gothic style.
Charter Hall also has approval to develop a $200 million new tower above an existing carpark at 140 Lonsdale Street, which stands behind 150 Lonsdale Street
The opportunity to rework 150 Lonsdale Street came with the departure of the major tenant Telstra from around two-thirds of the building.
Charter Hall seized on that vacancy, using the downtime to pursue the proposed upgrade which will yield a revitalised $300 million asset with 29,000sq m of office space.
A similar strategy, albeit on a larger scale, was adopted four years ago at the other end of the CBD, where the setback of 570 Bourke Street allowed Charter Hall to significantly expand the existing building.
Already around half of 150 Lonsdale Street has been committed to tenants, including RMIT and the state government. Around 16,000sq m is still available.
“The submission of 150 Lonsdale Street’s development application is a significant milestone for the Wesley Place project,” Charter Hall’s regional development director, Simon Stockfeld, said.
“Along with 140 Lonsdale Street, these works will form the final stages of this iconic precinct.”
The proposed works at 150 Lonsdale Street will include the creation of new tenant amenities, such as a new ground floor arrival experience with concierge. Retail tenancies will complement a business hub and an open-air terrace.
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