Corrs advises Telstra on largest Australian commercial office lease agreement

02 June 2009

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Corrs recently acted for Telstra in the largest lease agreement in the history of Australian commercial office transactions. It involved negotiating new arrangements for Telstra’s occupancy of three strategic CBD locations (242 Exhibition Street in Melbourne and 320 Pitt Street & 231 Elizabeth Street in Sydney), comprising more than 115,000 square metres of office space.

This deal represents an important milestone in Telstra’s property transformation – part of the Telstra-wide transformation that has been underway since 2005. It delivers significant annual lease savings to Telstra and allows for a major refurbishment of the three buildings over the next two years transforming Telstra’s office space in line with its new Office Accommodation Standards – an investment in Telstra’s employees and their work environments.

The Corrs project team worked closely with Vito Chiodo, Telstra’s Director of Property and David Stewart, Telstra’s Property Legal Counsel to successfully complete the transaction.

Corrs Partner Randall Gerkens led the Corrs Project Team, which included Paul Lewis, Sandy Hanspaul, David Ellenby and Craig Milner.

David Stewart, Telstra’s Property Legal Counsel, commented: “Randall, Paul and the Corrs team really put in a huge effort on this matter. While the commercial dialogue took months, the legal documents were really crunched over an intense fortnight or so.”

“Randall’s ability to stay on top of the detail allowed David and me to focus on getting the commercial issues right and executing our broader strategy”, said Vito Chiodo, Telstra’s Director of Property.

The deal was complex as it involved a number of parties, namely Investa Property Group (owner/manager of each of the sites), which was representing three separate property funds, Bovis Lend Lease (as the potential building and fitout upgrade services provider) and Telstra.

The deal needed to be structured in such a way that it provided maximum benefit to Telstra and also built in flexibility to allow the upgrade of the base building and fit out at all three sites.

The transaction was structured to enable Investa and Telstra the ability to make use of Telstra’s existing alliances with Bovis Lend Lease and Investa Property Group. On this aspect of the transaction, Corrs Partner Randall Gerkens said: “By leveraging its strong and successful existing alliances, Telstra was able to conclude the deal swiftly and efficiently”.