ATO move could bleed CBD trade
THE Australian Taxation Office’s decision to move its office out of the CBD is expected to drive up the city’s office vacancy rate and contribute to an oversupply.
Last week the ATO announced it would lease a new building, to be built on the fringe of the city, at Honeycombes Property Group’s Central building on Flinders St West, near CQUniversity.
But the latest Herron Todd White Month in Review stated there was not enough demand to absorb the excess supply the ATO move would create.
“It was recently announced that the ATO would relocate to a new building to be constructed in the fringe city centre,” the report stated.
“It is reportedly a $ 25 million, four- level, lifted office with the ATO to occupy about 4000sq m.
“The current ATO lease is due to expire in 2020, which would see a vacancy in its current office at Stanley Place, resulting in a large amount of quality office space hitting the leasing market,” the report states.
“The current depth of the local private sector will unlikely absorb this space given the already oversupplied state of the market.”
The ATO is now in Stanley Place, in a 14- storey office tower, developed in 1992.
The current property has a total net lettable area of 13,795sq m and is 79 per cent leased to the Federal Government — predominantly the Australian Taxation Office — until February 2020.
Colliers International Townsville managing director Peter Wheeler said the move will also put pressure on businesses where ATO employees frequent in the CBD.
“I think about 7500sq m is going to come up vacant and sadly that is going to put a lot of pressure back on the CBD office market,” he said.
“We already have a lot higher vacancy rate than we would like and unfortunately this further compounds the situation.
“Taking the ATO out of the core CBD area and moving them down to more what’s known as the fringe will probably mean a fair number of those people will now not venture into the CBD most days, like usually would have.
“When they’re in Stanley St there is only a short stroll to coffee shops and food outlets.”