Chadstone turns to offices in nod to future

Billionaire John Gandel and Vicinity Centres are forging ahead with a huge expansion of the shopping centre that could house 2000 office workers.

Artists impression of One Middle Road development at Chadstone

The landmark Chadstone shopping centre has given a hint of its future as a mixed use destination in the year of its 60th anniversary by unveiling plans for its fourth office tower.

The move marks around the 40th extension of the beloved mall, that is co-owned by the listed Vicinity Centres and billionaire John Gandel and has carved out a place in Melbourne’s heart as a top shopping destination.

It has come under pressure during the coronavirus pandemic and the mall owners have trimmed its value.

Chadstone Shopping Centre's latest office development One Middle Road.

But they have not let their relentless expansion of the mall rest and are now looking to kick off an office tower project worth $200m, once they find a tenant.

The shopping centre’s manager says that more companies are attracted to the site as they are looking to work differently and include more options for their employees, including access to shopping.

Chadstone centre manager Michael Whitehead said that the new tower – known as the One Middle Road development – would set new standards for suburban properties.

One Middle Road will have both A-Grace office space and some world-class retail areas, alongside high end dining and the existing five-star hotel.

The nine-storey tower will compromise more than 20,000sq m of office space and has been designed with a convenience-led approach in mind, giving it direct access to Chadstone and the benefits of its expanding dining and entertainment terrace, and new fresh food and wellness areas.

Inside image of Chadstone Shopping Centre's planned office development One Middle Road.

Mr Whitehead said the project adds 20,000sq m on top of the existing 33,000sq m of offices at the centre. Offices have been a feature for more than five years and a hotel opened in late 2019.

He quips it was not the “greatest” timing for the hotel but says it is now performing well and is keen on getting an office precommitment to start construction on that tower.

“We’ve already been talking to tenants … there is really solid interest in this sort of development outside of CBD locations,” he said. The Chadstone boss argues that these areas are going to be even more important in future, predicting that companies will set up satellite offices while also keeping space in central business districts.

“Coming out of Covid-19 people want to work closer to home,” he said. Chadstone already has an office population of about 3500 office people and will add another 2000 office workers.

Up to 2000 staff could be working at Chadstone Shopping Centre's latest office development, One Middle Road once it opens.

Mr Whitehead said there was an opportunity to grow new office projects in suburbs as they offered the opportunity for more spacious projects allowing for more sustainable builds.

But Chadstone will always be known as a place for shopping and he says there has been a significant return of traffic across the portfolio. While people can buy online they still need shops, he said.

“Our job as mall owners is to create amazing experiences,” he said. “The retailers will start to see stores are more about opportunities for show rooming and display.”

“We’re already back to pre-Covid-19 levels which I think shows a real confidence in the environment,” he said. ”We think that size and scale and uniqueness are some of the reasons why people will really want to come and work here.”