NAB to 'mothball' Docklands headquarters as Victoria locks down

NAB will "mothball" two major office towers for the foreseeable future, including its Melbourne Docklands headquarters, as Victoria faces increasing restrictions amid a possible second outbreak of coronavirus.

The bank notified staff on Wednesday that from July 14 it would indefinitely stop using its Docklands offices at 700 Bourke Street and 800 Bourke Street, known as the Rubik's Cube due to its colourful exterior. The two buildings house a large proportion of NAB's 34,000 strong workforce.

An internal view of NAB's headquarters in the Docklands.

All staff who have been working out of those two buildings in recent weeks have been asked to relocate to the bank's older office tower at 500 Bourke Street in the Melbourne CBD.

The announcement came as the Victorian government increased restrictions on 10 postcodes, ordering residents living in those areas to refrain from leaving home unless for school, work, shopping or medical care starting at midnight on Wednesday.

The vast majority of large companies have asked staff to work from home where possible for public health reasons. NAB is believed to be the first major Australian employer to mothball a large tenancy to save on costs such as electricity, cleaning and security. It is still paying rent.

NAB's Group Executive People and Culture Susan Ferrier informed staff about the move on Wednesday, saying it was a temporary change.

NAB's building at 800 Bourke is known as the Rubik's Cube in property circles. Credit: Darrian Traynor

"Due to the current spike in COVID-19 numbers in Victoria and continued advice from government to stay home, the number of NAB colleagues returning to our corporate offices remains very low," she said.

"NAB has been a proud part of the Docklands community for the past 16 years. We appreciate this is a difficult time for many small businesses and recognise the business that NAB colleagues bring to the Docklands precinct."

Ms Ferrier said local businesses such as cafes on the Docklands had been informed of the decision, which would be regularly reviewed. Staff will be updated about when and how they will return to the office. NAB will not be giving up the leases on either building at this stage.

Commercial real estate sources said the bank had in recent months spent millions on improving the fit-out inside 700 Bourke Street and 800 Bourke Street. They said they would be extremely surprised if the bank did not return to those offices in the future.

While NAB has no immediate plans to exit the buildings, NAB chief executive Ross McEwan said in May the bank would probably not need all of the office space it had in the future.

"There'll be a lot of businesses, ourselves included, that'll give their staff some optionality around where they operate from and you might find, for example, a building that I operate in, will we ever have 5000 people in it again? Will we need it? The answer is probably no," he said on a NAB podcast.

A senior NAB source said the mothballing of the buildings would reduce costs associated with running the two near-empty buildings and staffing cleaners for every floor and security staff. The decision will also reduce the environmental impact of powering and heating the buildings while the vast majority of staff are working at home.

One of the buildings at 700 Bourke Street, which can fit 6000 staff, has on some days in recent weeks had only 20 staff working inside, the source said.

NAB is the anchor tenant at a new development at 405 Bourke Street, which is expected to be completed in the second half of 2021 or early 2022. The bank will then leave its tenancy at the older 500 Bourke Street for the new building. It expects to retain its Docklands leases.

Its rival Melbourne-based bank ANZ is not mothballing its buildings in the Docklands on Collins Street, a spokesman said. Unlike NAB, ANZ owns its flagship building in the Docklands.

Sydney-headquartered Westpac also hasn't mothballed its buildings in Sydney or Melbourne. Instead, the bank has been carefully trialling plans to return some staff to work in Sydney, though the bulk will work from home for the foreseeable future.

NAB's branch network will be unaffected from the move, apart from its Docklands branch located inside 700 Bourke Street.

With Clancy Yeates