Nishi building: $158 million public service offices sit half-empty

The deal for the space in the capital's high-tech Nishi building was attacked by the Coalition as the worst public service property deal in decades and that was when it had a full complement of Climate Change Department bureaucrats working there.

The offices were leased to accommodate 750 public servants but the Industry Department has confirmed there are just 358 working there now.

And while the Coalition in opposition was scathing in its criticism of the deal at the capital's Nishi building, another government agency has recently managed to find more expensive digs, splashing out more than $100 million for luxury offices at one of Sydney's best addresses.

The Australian Prudential Regulatory Authority has scored itself an 8000 square metre slice of the CBD's prestigious Martin Place, paying landlords Charter Hall about $105 million for a 10-year deal.

The offices, marketed as "Sydney's most impressive relocation opportunity for years", are only two-thirds the size of the Nishi but will cost about the same, $10.5 million a year in rent, when the self-funded financial industry watchdog moves in about 600 of its staffers in October.

A Finance Department spokeswoman confirmed that the procurement rules had been followed with Finance signing-off in July 2014 on a cost-benefit analysis of the Martin Place deal.

But Finance is refusing to release the numbers underpinning APRA's move to its new prestigious location, claiming the documents are "commercial in confidence".

The Nishi deal was controversial from the start, occupied by 740 bureaucrats in the now-defunct Department of Climate Change in late 2012, it was a target for the Coalition in opposition which held it up as a symbol of Labor waste.

Environment Minister Greg Hunt described the 15-year lease as one of the worst property deals for the Commonwealth in 20 years, pledging to review the arrangement, while his colleague Jamie Briggs said it was "an unbelievable reckless waste of Australian taxpayers' money".

Climate Change was abolished in 2013 with its functions absorbed by the Department of the Environment, and in the "machinery of government" upheavals across the public service in the wake of the Abbott government's election, the Industry Department ended up with responsibility for the Nishi lease.

But an Industry spokesman was unable to point to any progress on a review of the Nishi lease.

"The department continues to work with the Department of Finance in relation to the consolidation of Commonwealth lease holdings," he said.

Mr Hunt's office would not take questions on Monday about the half-empty offices, on the basis that the last of his Environment Department's public servants had left the building.

An industry analysis published last week laid bare the scale of the task faced by the Finance Department as it tries to tackle what BIS Shrapnel called the "500-pound gorilla in the room" of empty public service office space in Canberra.

It is understood that Finance, which is planning to move itself into new high-end offices in a prestigious area of Canberra, has already identified 30,000 square metres of surplus space it wants to fill as part of the "Tetris" project.

The problem goes way beyond Canberra with other departments, particularly the Australian Taxation Office which had 6500 desks sitting empty around Australia on the last available figures, trying to offload surplus office space in capital cities and regional centres.