IBM to take up AWB's space

IBM to take up AWB's space
Maurice Dunlevy
April 12, 2007

THE scandal-plagued and slimmed-down AWB will sub-lease three floors of its Melbourne head office to IBM.
The deal, to be announced soon, involves levels 13, 14 and 15 of the APN Property Group-developed - but Cromwell-owned - 380 La Trobe Street building, where AWB has about nine years to run on its head lease.
IBM has agreed to a rental of about $280 a square metre net for around 3300sqm, although neither it nor AWB was willing yesterday to confirm the deal.

AWB leases about 11,250sqm on the ground floor, level one and levels 13 to 21, which accounts for about half the building.

The balance is occupied by the Australian Taxation Office, which is on levels four to eight, and workers compensation management company Cambridge Integrated Services Victoria, which leases more than 3000sqm on levels 10 to 12.

A rash of AWB head office redundancies overseen by new managing director Gordon Davis after the Iraqi kickbacks scandal has freed up three floors of the 24-level building, which Cromwell Diversified Property Trust purchased for $88 million in December 2005.

IBM's main Melbourne offices are in one of two towers at Deutsche's Southgate complex.

IBM has naming rights to its 60 City Road building, where it originally signed up for around 25,000sqm in the mid-1990s.

After years of speculation about moving out, IBM has reportedly agreed to stay on after its lease expires in 2009.

Meanwhile, in Adelaide, developer Zis Ginos has struck a new leasing deal for his CBD Regent Arcade, signing Bendigo Bank to a five-year lease with two five-year options.

In a deal, brokered by Peter Isaksson, Savills' South Australia manager of retail leasing, Bendigo Bank has agreed to pay annual rent of $148,800 for a 186sqm shop.

Bendigo will move from an existing branch at the corner of Frome and Grenfell streets.

Mr Ginos paid $26.3 million for the arcade, which runs between Rundle Mall and Grenfell Street, two years ago.

Mr Ginos has also snared Sarah's Cafe group as a tenant for his Leigh Street precinct in the CBD.

Mr Ginos bought the entire city street for about $9.5 million in 2003.

Savills has signed long-standing cafe owner Stuart Gifford and business partner Andrew Cooper to a 10-year lease at 12 Leigh Street.

The operators of Sarah's Sister's and Future Cafe at seaside Sempahore have opened a new CBD cafe, live music and gallery outlet.

The Leigh Street lease involves around 350sqm at an annual rental of $90,000.