Telstra Agrees to AUS $550 Million HQ Build-to-Suit in Brisbane

The Australian - December 12, 2006

Telstra has struck Brisbane's biggest office lease as it moves to consolidate its massive property requirements. The telco will lease a total of 50,000sqm in generating a new purpose-built 30-storey office tower at 275 George Street and sparking the refurbishment of Northbank Plaza in Ann Street next door. The buildings will house its 2500 office workers and 2000 call-centre staff.

Telstra chief executive Sol Trujillo said the new leases, to begin in 2008 and 2009 when the new buildings are complete, meant it would consolidate from eight Brisbane locations down to the two new towers. The deal would result in annual lease savings of $11.65 million from 2009, Mr Trujillo said.

Sydney-based property company Charter Hall will develop the $550 million complex through two of its wholesale property funds. Brisbane has been one of the country's hottest office leasing markets with an all-time low vacancy rate of 1.8 per cent and rents surging 23 per cent in the year to September, according to agent Jones Lang LaSalle.

Telstra director of property Vito Chiodo declined to comment on the rent to be paid on the 10-year leasing agreement. Industry sources said the telco's rental bill on the new deal was likely to gross around $500 per square metre, but with significant incentives for such a big deal.

There has been ongoing market speculation that Telstra will also sell part of its $2 billion-plus property holdings. In 2002, Telstra boosted its bottom line with the $570 million sale and lease-back of seven office properties to Investa Property Group. Sphere: Related Content