Commonwealth Property Fund and BT Office Trust extend Deloitte Touche Tohmatsu lease

19 February 2002

Commonwealth Property Fund (CPF), 70 per cent owner of Grosvenor Place, and BT Office Trust (BTO), 30 per cent owner, have negotiated an extension to Deloitte Touche Tohmatsu’s (Deloitte) lease in Grosvenor Place.

The new lease "locks" away the whole of the low rise tower of Grosvenor Place to November 2010. The further term will now represent a Deloitte occupancy of Grosvenor Place over some 18 years to expiry.

This follows lease extensions negotiated by CPF and BTO over the past 12 months to other major tenants at Grosvenor Place, including Blake Dawson Waldron, to 2011, and JP Morgan, to 2006.

Together all three tenants represent some 46,000 square metres or 53.5 per cent of Grosvenor Place’s net lettable area (NLA).

Under the new terms, Deloitte will occupy levels 1 to 10 plus a retail component taking its total NLA to approximately 18,000 square metres or 21 per cent of Grosvenor Place’s NLA.

Currently, Deloitte occupies levels 1 to 5, 9 and 10 which represents about 11,750 square metres of space under direct lease, due to expire in November 2004.

The Deloitte transaction extends Grosvenor Place’s weighted average lease expiry by area from 4.78 years to 5.72 years and greatly improves the building’s rental profile, reflecting an average rate of $730 per square metre gross over the term.

According to Mr Rod Cowdroy, CPF Fund Manager, Grosvenor Place continues to mature as a premium grade commercial office investment.

"This new lease, together with the leases negotiated last year, is significant and confirms Grosvenor Place’s standing as a quality premium grade property, able to accommodate the ever-expanding requirements and expectations of blue chip tenants," Mr Cowdroy said.

"Retention of major tenants has been the key to the joint owners’ strategy of active management of Grosvenor Place," he added.

Mr Daniel Scamps, Fund Manager for BTO, said "This agreement demonstrates the changing dynamic in the owner/tenant partnership. BTO and CPF worked closely with Deloitte to provide an innovative CBD commercial office space solution, accommodating their business requirements over the next decade."

"The space solution for Deloitte’s, which includes some innovative features such as a client meeting centre with its own direct street entrance and a private café, is an example of this partnership approach blending tenant business and cultural requirements with active asset planning," Mr Cowdroy added.

"Grosvenor Place now has the distinction of being able to accommodate sizeable, quality financial, accounting and legal firms for terms of 16 to 23 years, a facility not easily found elsewhere," Mr Cowdroy said

CPF is a fixed life unlisted property fund comprising $2.4 billion in retail and office assets, with unitholders including major superannuation funds. The fund is managed by Colonial First State Property, the property funds management arm of Commonwealth Bank of Australia.

BTO is a listed property trust trading on the Australian Stock Exchange. It has total property assets of over $1.8 billion, spread predominantly across 11 premium and A grade office properties situated in key domestic markets, making up one of the highest quality office portfolios in Australia. BTO is managed by BT Funds Management, a member of The Principal Financial Group, an international financial services organisation with A$230 billion under management and a member of the Fortune 500.