Rio Tinto has blindsided the Brisbane commercial property scene with plans to move from its “purpose-built” offices on Albert St and into the completed Midtown Centre by mid-2021.
The mining giant has signed a 10-year lease agreement for 20,000 square metres of office space at the top of the under-construction tower, which represents almost half of the 42,000 sq m the Midtown Centre will offer across its 26-storeys.
A source close to the commercial property space in the region said the decision shocked most of those in the market and none more than Dexus.
The developer was said to have built the 123 Albert St site where Rio Tinto currently resides expressly for the company, who will now leave the offices after just one lease term.
The Rio Tinto dealings mark the first major tenant for the Midtown Centre since its development was given the green-light
“All of Brisbane thought they would stay … usually you expect to get at least two terms out of an asset like that.”
It’s also understood that Rio Tinto had been looking for new offices for some months now, going as far as to shortlist several potential offices.
But Dexus’ loss will be the gain of the joint venture formed to develop the Midtown Centre – AM Brisbane CBD Investments.
Made up of financial capital firm Ashe Morgan and Brisbane-based developer DMann Corporation, the consortium has been advertising office space in the building for between $850 and $860 per sq m, which would translate into a $17.2 million rental bill a year for Rio Tinto.
Knight Frank’s Campbell Tait and Mark McCann are understood to be behind the deal, but requests for comment from the pair were refused due to confidentiality agreements around the transaction.
The Rio Tinto dealings mark the first major tenant for the Midtown Centre since its development was given the green-light by Brisbane Council last March.
The development will combine two vacated government buildings just north of the Brisbane River at 155 Charlotte St and 150 Mary St to create one super-tower worth about $500 million.
The project will include one campus-style podium floor that will cover up to 2500 sq m of space, a sky garden on the building’s 20th floor, a new heritage facade on the nearby Mary Charlotte laneway, and the restoration of another on Charlotte St.
The Midtown Centre is expected to be completed by July 2021 and Rio Tinto’s move-in day is flagged for August that year.
It will mark the end of Rio Tinto’s 12-year tenancy of 123 Albert St, which it moved into in 2009.