Australian Unity Office Fund plans upgrade to Telstra House

The Telstra House office tower on Pirie St in Adelaide is set for a makeover, as its owner searches for new tenants to replace the telco.

Artist’s impressions of upgrade to Telstra House on Pirie St. Supplied by Australian Unity Office Fund

The owner of the Telstra House office tower in Adelaide will invest in a multimillion-dollar revamp of the building in a bid to secure new tenants to replace the telco.

The investment by ASX-listed Australian Unity Office Fund comes four years after a $19m refurbishment of the building, and will include changes to the design of the forecourt, ground floor entrance and lobby, the introduction of a concierge service and several new retail tenancies.

New co-working spaces, improved end-of trip facilities, lift upgrades and refurbishments across multiple floors will be designed to “maximise tenants’ occupancy and wellness experience”.

Australian Unity Office Fund fund manager Nikki Panagopoulos said the project offered an opportunity to “re-create an Adelaide landmark”.

She said the works would be “substantial” but it was too early to provide a cost estimate.

Artist’s impressions of upgrade to Telstra House, which will include development of new retail space. Supplied by Australian Unity Office Fund

“This is a significant investment to create an A-grade, modern contemporary office building with energy efficient and green star credentials,” she said.

Telstra announced this week it would in 2023 depart its longstanding home on Pirie Street, and move to 6000sq m in Charter Hall’s $450m development on King William Street, which is currently under construction.

It has occupied the Pirie St tower since it was built in 1987, and its departure will leave more than 90 per cent of the building’s office space vacant.

Australian Unity Group, Viridian Financial Services and Babcock Offshore Services currently operate from the top two floors of the 25,000sq m building.

Australian Unity Office Fund says subject to development approval, it expects to begin construction by the middle of next year.

The first stage of upgrades would be completed within 18 months.

Ms Panagopoulos said the fund was also working on longer term plans for a facade upgrade.

“Any full tower facade upgrade will be a comprehensive upgrade and possibly incorporating full height glass for added natural light, and optimised with the introduction of renewable energy initiatives integrated into the facade.”

The upgrade to Telstra House will include a new entry and lobby area. Supplied by Australian Unity Office Fund

Shareholders were due to vote this month on a merger between Australian Unity Office Fund and sister fund, Australian Unity Diversified Property Fund, to create the Australian Unity Property Fund with $1.2bn of office, convenience retail and industrial real estate.

However, family funds and an Asian-based hedge fund are believed to be among shareholders resisting the plan.

Australian Unity Office Fund told the market earlier this month that the planned vote on the merger was being delayed because some shareholders were not supportive of it in its present form, and it planned to engage further with the shareholders to determine if there were opportunities to make refinements to the proposal.