Hopes of urban renewal at the struggling Woden town centre have been dashed with news that another of its giant government office blocks looks likely to sit empty for the foreseeable future.
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The owners of Canberra's tallest building the Lovett Tower have walked away from the dream of turning the landmark into retirement accommodation and will instead use it as the centrepiece for a giant new office development.
Woden has emerged as the epicentre of Canberra's growing glut of empty office blocks as federal departments downsize and even ACT government outfits joining the exodus from the ailing town centre.
Lovett Tower owners The Cromwell property group have bought an office building called Borrowdale House next door to the tower for $7.6 million and look likely to turn it into parking to complement the redeveloped offices in Lovett.
The purchase gives Cromwell a development site of 3200 square metres, opening up more options for a redevelopment of the area.
But nothing is likely to happen any time soon, with Cromwell making it clear that it will not start work on a revamp until a deal is struck with a large occupier.
Lovett's major tenant, The Department of Veterans' Affairs is preparing to move out in 2016 and the Department of the Environment's public servants packed up their desks and left in June 2014.
The remaining floors in the 40-year-old landmark are leased by the Department of the Prime Minister and Cabinet in a deal that expires the same time as that of Veterans' Affairs.
Cromwell won praise from the local property sector in July 2014 when the developer suggested a transformation into the apartments or even retirement units for the ageing block.
The Property Council said the idea might show the way to recovery, not only for Woden but for Canberra's other town centres which are facing decline.
But those hopes were crushed on Thursday with news that Lovett's 22 floors were likely to be added to the vast swathes of former government offices sitting empty around Canberra.
"The weak Canberra leasing market and departure of the major tenant in Lovett Tower next year provides a good opportunity to reposition the asset in preparation for a recovery in demand for high quality space in one of the city's main business precincts," Cromwell said.
The developer is planning a multi-million dollar refurbishment providing top-of-the-line "A-grade" standard office accommodation with a 4.5 energy rating and a facelift to give the tower a new entrance and facade.
Borrowdale, previously earmarked for a towering residential complex, is likely to be turned into a car park to give the revamped Lovett Tower, which currently only has 26 dedicated car spaces, a competitive edge in the parking-hungry office market.
But the Woden Valley Community Council, which was hoping for a residential or mixed use project at Lovett, greeted the prospect of another vast empty office block with dismay.
Council President Martin Miller said he was "not particularly" optimistic about Cromwell's chances of finding an occupier in a tough office market.
"Not at the moment when there are plans to move more public servants at Canberra," Mr Miller said.
The council president said he and his colleagues were hoping to see a new use for Lovett that would breath some life into the surrounding streets, currently beset by empty offices, failed retail and hospitality business and abandoned government shopfronts.
"There should be a component of residential in there...to bring some more activation to the Woden Square area because nobody really goes there unless they're walking through at lunchtime," Mr Miller said.
