Newcastle CBD – 55 Bolton Street

Original Strategy

Numbers 51-55 and 61 Bolton Street are centrally located in Newcastle’s East End. This is an area gradually transforming into a high-density and high-end residential zone. It is a commanding CBD site, with a combined area of 3,629 square metres, zoned R4 High Density Residential, but with existing use business rights. The majority of income is underpinned by Commonwealth and State Government leases, in addition to major engineering firm Parsons Brinkerhoff.

As such, there is future redevelopment potential for residential, hotel, medical, student accommodation or retirement living. Bolton Street offers an outstanding lifestyle amenity close to the harbour, beaches, cycleways, shopping area and public transport. A revitalised rail corridor has created an opportunity for more housing, jobs and an improved public domain.

To us, 51-55 and 61 Bolton Street offered the best of both worlds; good office accommodation underpinned by a long Commonwealth Government lease, as well as sufficient potential to add value. While 61 Bolton Street was fully leased to the Commonwealth Government and had recently undergone an extensive refurbishment including the upgrade of its air conditioning system, 51-55 Bolton Street had vacancy and presented very poorly. We identified that it would benefit from cosmetic improvement to its entrance foyer, lobbies, lift cars and other common areas. The building income did not take into account the benefit of doing this work but it was reasonable to assume that once complete, the building would be more appealing to prospective tenants and attract at least 10% higher rent.

The Journey

At exchange, the repositioning strategy of 51-55 Bolton Street was formulated and at settlement, it was adopted. The building had a high vacancy level but we had a strong conviction that the family court in 61 Bolton Street needed additional space. They also had a long term lease which precluded them from relocating. We suggested to them that we accommodate their expansion by breaking through from 61 Bolton Street and joining their space with the vacant whole floor of 51 -55 Bolton Street. This negotiation took two years to finalise. Ultimately, we achieved a reset of their lease in 61 Bolton to a new 15-year term, and the same 15-year term for the new space in 51 – 55 Bolton. In addition, we renewed the multinational tenant, as well as the state government department. Legal Aid. The repositioning strategy was now complete and the building successfully sold.