Rejuvenated West Block on the market for $70 million

Historic West Block in Parkes has been listed for sale at a “guide price” of $70 million after a $45 million renovation to bring it up to A-grade office level.

The heritage-listed property at 21 Queen Victoria Terrace features over 8200 sqm of premium office accommodation. It comes with an 11-year Commonwealth Government lease and fixed income growth of 3.50 per cent a year.

It is just 400 metres from Parliament House and is one of three original buildings from when the Commonwealth Government moved from Melbourne to Canberra.

West Block was occupied by the Australian Electoral Commission until 2015 before being sold to Geocon in 2017 with plans to convert the three-storey office into a boutique hotel.

But after sitting empty for several years, Geocon sold the building to Oceana Property Partners in February 2022 for $24.5 million.

It was a good deal for the Canberra development giant, which acquired the property on a 1.7-hectare landscaped site from the Federal Government for $6.25 million.

OPP set about revitalising the building, pursuing a 5 Star NABERS Energy base building rating in March 2022 and a sympathetic restoration undertaken by a project team that included Canberra-based commercial design practice Capezio Copeland, energy efficiency experts at DeltaQ and project management consultancy ChangePM.

A Works Approval has already been secured for a new 690 square metre pavilion in the southeast corner, designed to be a venue for potential food and beverage operators or retail users.

Capezio Copeland’s focus was on a sympathetic restoration and retention of West Block’s heritage aesthetics.

Director Lisa Capezio told Region in July 2022 that the upgrades at West Block would redefine what a modern workplace could be, with a ground-floor experience designed to impress visitors and enhance the well-being of occupants.

Ms Capezio said it was rare to be able to combine the functionality and aesthetics of a modern workplace with rich historical context.

“So anything that we’re adding to the internal design of this building, you’ll still get a beautiful appreciation for the heritage and the original architecture,” Ms Capezio said.

Daniel Wolman and Oliver Hay of Cushman & Wakefield and Paul Powderly, Alex McColl and Matthew Winter of Colliers are handling the sale.

Mr Wolman said this was an asset of national significance, featuring the ultimate investment credentials.

“West Block’s place in Australian political history, combined with its location in one of the best-performing office submarkets in the country, political significance, and secure government lease, makes this a unique opportunity,” Mr Wolman said.

Mr Powderly of Colliers said West Block was poised to continue playing a central role in Australia’s government landscape for years to come.

“With exceptionally low vacancy rates and long-term government tenancy, this is an investment that offers both stability and prestige at the most powerful address in Australia,” he said.

A development surge is feeding a vacancy increase in Canberra, although the national capital’s vacancy rate of 9.5 per cent is still the lowest among the capitals.

According to the Knight Frank ACT Office Market Report, the Territory continues to experience strong demand for A-grade offices, particularly in the Parliamentary Precinct and with high sustainability features.

Knight Frank partner Nathan Dunn said the Commonwealth’s APS Net Zero policy would continue to drive the public service to newer, more efficient buildings, although these would also produce savings in running costs.