License article

Media House deal tipped

FAIRFAX Media is believed to have found a prominent tenant to take over more than a third of the office space available in its Melbourne headquarters after large cuts to its workforce.

Industry sources say broadband provider NBN Co is set to sublease two floors of Media House in Docklands, home to The Age, The Australian Financial Review and radio station 3AW.

Fairfax Media, which occupied the custom-built six-storey building in 2009, has been consolidating its office space after implementing voluntary redundancies. Staff have also been moved to South Melbourne after a merger with Metro Media Publishing.

The mooted deal involves at least 4000 square metres of premium space in the award-winning, five-star Green Star development owned by Commonwealth Property Office Fund. Fairfax and its leasing representatives, International Property Group, declined to comment.

NBN Co, which has reportedly spent more than $11 million leasing and fitting out space at 360 Elizabeth Street in the CBD, confirmed the government-owned company was in the market for office accommodation.

''We are currently in negotiations with lessors. The Fairfax building in Docklands is one of the buildings we are considering,'' a spokeswoman said.


The speculation comes as new research shows availability of full-floor office space fell 20 per cent after Suncorp's recent decision to sign a lease in 530 Collins Street.

Savills reports the number of full floors immediately available for occupation fell in the CBD from 88 to 70 in just three months, reversing a steady rise in vacancy that had hit a post-GFC peak in July.

''These figures are still above the average for the last three years, but what is really pleasing is that the figures have been trending down now for four months,'' Savills Victorian head of research Glenn Lampard said.

Most of the decline has come from Suncorp's recent leasing of 15,500 sq m - or 12 floors - at 530 Collins Street. Suncorp, which holds naming rights for its current quarters at 447 Collins Street, is set to leave the ISPT-owned building in mid-2013 after problems with the concrete facade that will require lengthy and disruptive repairs.

Savills' Full Floor Availability Report has also recorded an across-the-board decline in the overall full-floor vacancy rate based on the amount of currently empty space, uncommitted space in new developments, and occupied but soon-to-be-available space in the CBD.

Prime full-floor vacancy fell from 13.1 per cent to 11.9 per cent in the October quarter.