Listed Singaporean property player Lian Beng has leased an entire building in Franklin Street to two Victorian government departments.
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The hyperactive Singaporean investor bought the 18-level city office late last year for $51.5 million from 11 individual strata owners.
The building has remained largely empty since ASX-listed call centre group Salmat moved out in February.
Victoria's Department of Justice and Regulation will be joined at 50 Franklin Street by the Carlton Justice Service Centre, with both government bodies consolidating from different locations.
Colliers International director of office leasing Edward Knowles negotiated the 10-year lease on a gross-per-square metre rate between $500 and $550. Savills Australia were conjunctional agents.
The building has about 11,500 sq m of net lettable area.
"It is understood the new tenant will increase the base building's NABERS energy rating from 1.5 stars to three-plus stars throughout the tenancy term," Mr Knowles said.
Lian Beng, which has a market capitalisation on the Singapore stock exchange of about $209 million, has been an active player in Melbourne this year.
In July, the group sold a development site at 596 St Kilda Road for $34 million to a Taiwanese developer after obtaining a development permit for a 19-level building with 170 apartments.
Two months earlier it offloaded Newspaper House, with its colourful 1930s mural, at 247 Collins Street for $35 million to Malaysian conglomerate Oriental Holdings.
The Franklin Street building was formerly the headquarters of Qantas and was developed by PDG Corporation into strata offices in 2010.
Lian Beng purchased it as a potential development site.
The property is in the heart of Melbourne's fast-growing student precinct near RMIT and Melbourne University that has had a wave of development catering for the education sector.
Melbourne and Sydney's office markets have had a flurry of leasing activity with growing demand for space, particularly from technology companies and co-working firms.
Another government department, information technology provider Cenitex, is speculated to be in the market for 6000 square metres of space.
Tech giant Google will set up its first Melbourne office in Pembroke Real Estate's signature 161 Collins Street building along with sportswear brand Nike.
In the past two years, LinkedIn, Twitter, Apple, Amazon Web Services, Atlassian and Dropbox, among others, have leased CBD offices in Sydney and Melbourne.
Co-working companies, including WeWork, Servcorp and Wotso, are also leasing space that traditionally was the domain of banking, legal and financial service firms.
Within a year, WeWork has become Australia's largest co-work provider with 13.6 per cent market share, Knight Frank research shows.
Australia has more than 300 functioning co-working spaces, up from only 60 in 2013, according to a recent Sydney University study.
Sydney and Melbourne account for the lion's share, with most co-working spaces targeting small business workers in professional services or creative/knowledge-based workers, Sydney University's research found.
