Victoria Place was originally to have a NABERS 5.5-Star energy efficiency rating, but the government’s interest in the building prompted its owners to upgrade it to a top-of-the-range 6-Star rating. So far, it has achieved a 6-Star Green Star Office Design rating, and is awaiting a rating on its 6 Star NABERS and Gold WELL certifications.

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The 25,000 square metre Victoria Place work space connects indoor and outdoor spaces through floor-to-ceiling windows, giving uninterrupted views of the city and allowing fresh air and natural light to enter the building. New technologies fitted include artificial intelligence software to monitor energy performance and a rooftop solar farm.

The moves come as businesses and governments struggle to attract staff back into the office full-time, and as office values are slashed by their owners.

Colliers leasing agent Andrew Beasley, who negotiated the state government deal with Travis Myerscough, said despite negative market sentiment, the city leasing market remains busy. “We’ve got 32 new deals underway and there are new leasing mandates of 120,000 square metres of space in the market, all of it over 5000 square metres,” Beasley said.

“If you want to get into any of the new generation [energy efficient] buildings, they are full. The quality buildings, where money has been spent, are getting results,” he said.

Victoria Place was purchased for $330 million in February 2020 – just as the pandemic was getting underway – by a joint venture including Singaporean-based ARA Private Funds (now owned by ESR Australia) and Canadian-based QuadReal Property Group.

Developers Golden Age and Time & Place paid about $60 million for the site in 2016, proposing a new office building among a string of new properties in the East Melbourne-Collingwood fringe area.

ESR Australia boss Phil Pearce said challenging market conditions like Melbourne has experienced in recent years “often prompt a flight to quality”.

Other recent major CBD office deals include two at Charter Hall and GIC’s new tower at 555 Collins Street, which is now 70 per cent pre-committed.

Ericsson is moving out of Docklands into three floors covering 3350 square metres, and co-working group Hub is taking another three levels. Also recently announced was CBA’s 15,000 square metre lease at Cbus’ new 60,000 square metre tower at 435 Bourke Street.

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