Big news for banks as office moves take shape
Australia’s top banks are shifting their headquarters into glittering new skyscrapers along the eastern seaboard, setting commercial property markets alight at a time when they are also dramatically overhauling their workforces.
Moves by the big four — National Australia Bank, Commonwealth, ANZ and Westpac — and lesser lights including Suncorp are also driving the construction of major new towers in Sydney, Melbourne and Brisbane.
Their moves may seem incongruous at a time when the banks could slash staff numbers by up to 50,000 — with the NAB saying this month it would sack 6000 workers over the next three years — as they deal with the fallout from the shift to online finance and automation.
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But the developers behind the new wave of buildings are pitching them as money savers for the banks as they will receive big incentives to move in and the new facilities will allow them to work more efficiently, using developing technologies that allow productivity — and costs — to be ruthlessly assessed.
In one of the largest plays the National Australia Bank is poised to announce that it will shift its offices, sprinkled around the Melbourne CBD, into a new $1 billion office building being developed by Canadian giant Brookfield.
A concept image of the 405 Bourke St office development. Picture: 405bourkestreet.com.
That move will also likely spark a deal that will see a half-stake in the underdevelopment project sold to ISPT, with the transaction to set a new benchmarks for towers in the already hot Melbourne market.
NAB plans to retain its Docklands building but will shift staff from several CBD and east Melbourne locations into the new landmark tower at 405 Bourke St.
Brookfield is well into works on the 29-level building which will span 66,000sqm, with NAB to commit to a 12-year lease over much of the office space and a ground-level banking chamber.
The bank and Brookfield declined to comment on the deal brokered by Knight Frank.
Brookfield already has close ties with NAB, which is anchoring it’s $1.8 billion Wynyard Place Sydney development that is to be finished in 2020.
Brookfield sold almost half its stake in the $1.8 billion Wynyard Place Sydney to AMP Capital and UniSuper in September. The quarter stakes were worth about $450 million and the deal showed a sharp yield of about 4.5% – a record for that kind of development.
Westpac has cut its footprint at 275 Kent St in Sydney to 23 of the 32 floors.
Elsewhere in Sydney, US private equity giant Blackstone is readying to sell a half stake in Westpac’s head office in Sydney’s CBD that it co-owns with the listed Mirvac Group. The entire building could be worth $1.5 billion and will be a benchmark offering next year.
The bank is trimming its space to 23 levels of the 32-storey tower at 275 Kent St but the complex will stay as its home base until at least 2030.
Meanwhile, the Commonwealth Bank has added a smaller 5000sqm requirement to the mix as it continues to search for a new Sydney headquarters. It has been looking at the fourth tower proposed for Sydney’s Darling Park complex, which could see it anchor the $1 billion high-rise office and retail precinct.
But any move is likely to be decided by the successor to Commonwealth Bank chief executive Ian Narev, who is due to retire this financial year.
ANZ’s wealth management arm this month struck a deal with the Investa Office Fund that will see it committed to the trust’s complex in Sydney’s Kent St for at least another five years.
Suncorp is weighing up a move to a headquarters proposed by Lendlease that would tower above Brisbane’s GPO building. It is also assessing projects by Investa/Charter Hall, Mirvac, ISPT and a private developer.
This article originally appeared on www.theaustralian.com.au/property.
