COMMERCIAL PROPERTY, SALES & LEASINGGENERAL PROPERTY

Qantas looking at new destinations

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MORE than 25,000 sqm of office space has been added to the leasing market, as Qantas consolidates its property footprint and considers moving its headquarters in a bid to reduce its sky-high rent bill.

Following several months of halted domestic and international travel that incurred massive job losses and a $1.9 billion annual loss, the national carrier yesterday outlined a group-wide review of its property space on which it spends $40 million in rent each year.

“Like most airlines, the ongoing impact of COVID means we’ll be a much smaller company for a while,” chief financial officer for the Qantas Group, Vanessa Hudson said.

“Most of our activities and facilities are anchored to the airports we fly to, but anything that can reasonably move without impacting our operations or customers is on the table as part of this review.”

Colliers has been appointed to sublease about 25,000 sqm of surplus office space. This includes nearly 20,000 sqm over two recently refitted buildings at its national head office at 10 Bourke Rd in Sydney’s Mascot. Some 14,690 sqm across six levels can be split by floor, and 5,036 sqm across two levels in a separate building are offered in one line.

About 2,000 sqm at 333 Collins St in the Melbourne CBD is available, and 1,500 sqm in Hobart. A lease on a 230 sqm Sydney CBD office due to expire in October will not be renewed.

The Mascot offices total about 49,000 sqm and are home to about 5,000 staff while Jetstar’s leased head office is in the Melbourne suburb of Collingwood and houses 1,000 workers. Co-locating the headquarters in a single place is being considered, according to Hudson.

Some aviation facilities such as flight simulator centres, currently in Sydney and Melbourne, and heavy maintenance sites in Brisbane will considered for relocation. There are no intentions to move any facilities offshore. About 750 work at the Brisbane facility.

Any relocations are likely to be staggered over time, potentially years.

“We’ll also be making the new Western Sydney Airport part of our thinking, given the opportunity this greenfield project represents,” Hudson said, adding that Qantas is “keen to engage with state governments on any potential incentives as part of our decision making”.

The federal government last week released further concept designs for the $5.3 billion future international airport at Badgerys Creek. Construction of a passenger terminal is expected to start by the end of 2021 after Multiplex, Watpac and a Lendlease-CPB Contractors joint venture were shortlisted for the works.

“This is about setting the Qantas Group up for the long term as well as recovering from the COVID crisis. And we’re open minded about the outcome. It’s possible that our HQ stays where it is but becomes a lot smaller, and other facilities consolidate elsewhere. Or we could wind up with a single, all-purpose campus that brings together many different parts of the group,” Hudson said.

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