Landlord Bellala blasts Services Australia for plan to relocate to In the Hanging Garden office building

A commercial landlord has hit out at a government department after it made a shock call in relation to the In the Hanging Garden precinct development.

A government department is facing backlash from its Hobart landlord after announcing it will relocate to a new office building planned for the much-hyped In the Hanging Garden precinct.

Services Australia, the federal agency responsible for delivering social, health and child support services and payments, currently occupies three sites in the city: 188 and 199 Collins St, and 1-3 Longreach Ave at Dowsing Point.

But the department plans to “consolidate” the sites before its leases expire in June 2024, entering into an agreement with Quintessential Equity to develop a new office building at 120 Bathurst St, formerly the site of the Xerox Shop.

Designs for the upcoming In The Hanging Garden precinct. Photo: Supplied

The cost of the building’s proposed fit-out is estimated at $32.8 million (excluding GST) and the department would enter into a 10-year lease of the site from 2024.

The move will enable Services Australia to achieve “operational and financial efficiencies”, it says, but Bellala, the landlord of the agency’s leased site at 188 Collins St, says the new office building would cause “serious adverse effects on the Hobart commercial rental market”.

In a submission to a Senate inquiry into Services Australia’s plan, Bellala warned the new building would drive up commercial rents in the CBD.

“The introduction of a new building of this size combined with the likely impacts of the pandemic on future office space requirements as flexible work from home arrangements become more common together with the requirement for existing landlords to backfill vacated space at the expense of others will result in significant adverse impact on all commercial rents in the Hobart office market for a prolonged period,” the submission read.

Designs the upcoming In The Hanging Garden precinct. Photo: Supplied

In its report published in March, the Senate’s Parliamentary Standing Committee on Public Works concluded that the 120 Bathurst St project “signifies value for money for the Commonwealth” and recommended that it go ahead.

Services Australia says the proposed consolidation won’t result in a loss of jobs or services.

Early demolition works have begun at the Bathurst St site, with Quintessential working with property management company Riverlee to develop the building, considered a key component of the In the Hanging Garden precinct.

However, the office building project must clear hurdles in the planning approvals process before it can proceed further. A development application has been lodged with Hobart City Council but is yet to be assessed.

A council spokesman said it was “possible” there could be “conditions” imposed on the developer, which might see the application altered.

$286m plan to transform CBD party precinct

Work has officially begun on the new In the Hanging Garden precinct, which is set to transform almost an entire city block and kickstart a cultural and commercial renaissance in the Hobart CBD, according to the developers.

The $286 million three-stage project is a collaborative venture between property development company Riverlee, which specialises in urban renewal initiatives, and Moorilla Group subsidiary Darklab – the creative agency behind Dark Mofo.

Bordered by Liverpool, Bathurst, Murray and Watchorn streets, the In the Hanging Garden site opened as a hospitality and performance venue in 2019 and has also hosted community markets.

Designs for stage one of the upcoming In The Hanging Garden precinct. Photo: Supplied

But Riverlee and DarkLab have grand plans to turn the block – which includes the historic Odeon Theatre and old Tattersalls Hotel – into a vibrant cultural precinct boasting restaurants, bars, live music, family-friendly venues, and residential and commercial space.

Designs upcoming In The Hanging Garden precinct. Photo: Supplied

“Our master plan is ever-changing and adapting to reflect the needs and interests of the city, and we will continue to listen to the community as we progress,” Riverlee development director David Lee said.

“This is an ambitious vision for a new urban neighbourhood, so we want to get the mix right.”

Designs for In The Hanging Garden precinct. Photo: Supplied

Town planning applications have been lodged and demolition works have commenced for the $71m first stage of the massive project, which will feature a 10-storey mixed-use commercial building at 120 Bathurst St, developed by Riverlee and Quintessential Equity and designed by Fender Katsalidis, the architects behind MONA.

“Drawing on our deep knowledge of Hobart’s unique culture and community, In The Hanging Garden presents locals and travellers with an empathetically designed precinct offering that authentically celebrates its vibrant heritage and provides accessible spaces for cultural creation, further propelling the city’s reinvigoration for years to come,” Fender Katsalidis Architecture director James Pearce said.

Designs for In The Hanging Garden precinct. Photo: Supplied

Mr Lee said the proponents had a “deep understanding of the block and the site’s long history”.

“The site at 120 Bathurst Street was carefully selected, with the precinct master plan in mind, as well as the consideration of future staging, including the existing operational Hanging Garden venue,” he said.

“Through a careful design process, we explored multiple design iterations to ensure the streetscape and local character of Hobart could be protected.”

Stage one of the development will also include a newly designed entrance to the precinct and the first part of a pedestrian link connecting Watchorn and Murray streets.

Designs for In The Hanging Garden precinct. Photo: Supplied

The second and third stages will see the establishment of several hospitality and live music venues, as well as tiered gardens and communal areas, connected by a network of laneways.

Heritage buildings such as the Tattersalls Hotel and Wellington House will be preserved under the precinct master plan.

The Odeon, originally earmarked for demolition, will be restored and a 180-key hotel built above it.

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