Petrol station giant Caltex looks set to move out of Sydney’s CBD and into the newly developed precinct of Green Square in what would be a major coup for the city fringe “town centre” which is yet to secure any big ticket tenants.
It is understood the ASX-listed company, which currently has its offices at 2 Market Street, is mulling the lease of about 9500sq m of space and 70 car spaces in the yet-to-be built four-storey building at 29 Bourke Road in Alexandria. The building could be worth $130 million or more upon completion.
Caltex Australia’s corporate head office is currently at 2 Market Street, where it is the second largest tenant occupying more than 9000sq m, alongside Allianz and The Commonwealth Bank. However last year it was announced Amazon would move in to the space and replace all three tenants as it steps up its global expansion.
The move to the city fringe would likely be a cost-driven exercise for Caltex, with some office rents around Green Square being offered at about half the price of what is generally available in the CBD.
Tenants considering the neighbourhood are being offered about $650 to $700 per square metre gross before incentives, according to those in the industry.
Chinese-backed developer Loftex Property recently acquired the site for $34 million and is seeking an anchor tenant before proceeding with the 10,000sq m development, which is located just 500 metres from the new Green Square train station.
One of their largest projects to date is the mixed-use high-rise development Embassy Tower in St Leonards.
Developer and investment group Tipalea Partners originally bought the site for $13.4 million in 2017 before gaining approval for a retail and commercial development across an L-shaped four-level building.
The property has been onsold twice since then, once for $31 million with development approval, and then to Loftex. Colliers International’s Michael Crombie handled the sales.
Mr Crombie and Karbon Property’s Joshua Watts and James McCourt have been engaged to lease the property.
Cushman & Wakefield’s Chris Hanley is understood to be negotiating the deal on behalf of Caltex.
The influx of residential towers has helped to boost amenity around Green Square, which will eventually accommodate 61,000 residents and provide 21,000 jobs, but big corporations are yet to follow.
Most large corporates are still fixated on having a CBD address. However, some recent leasing deals have seen companies taking out space on the fringe of the CBD.
Big data analytics specialist Quantium Group is set to move from 8 Chifley Square to the historic Locomotive Workshops Mirvac is refurbishing in South Eveleigh.
Meanwhile, top-tier law firm Hebert Smith Freehills made the bold decision in 2018 to open an office in Macquarie Park and move some of its staff from its prominent CBD office location at 161 Castlereagh Street.
Extracted from AFR