Private developer and landlord Riverlee has invested a significant amount of capital into its major Melbourne CBD commercial assets during the pandemic as part of a successful strategy to retain tenants.

The $11.3 million injection into end of trip facilities, lobbies, plant and equipment, speculative turn-key fitouts and additional upgrades over the past 12 months has seen Riverlee buck the trend where numerous other asset owners have scaled back on expenditure in the wake of the pandemic.

Known primarily for its new developments, Riverlee’s core business is their asset management division with the company owning and managing a large commercial portfolio primarily in Melbourne.

Retaining 98 per cent of tenants during the pandemic, Riverlee Managing Director, Kevin Lee, says that the capital expenditure demonstrates the company’s long-term asset management strategy.

“Having owned a majority of our properties for more than 20 years, we are treating this period as cyclical. For one, I have no doubt that once we put this pandemic behind us, there will be a shift back to workplaces and the CBD, as they are both irreplaceable. We also strongly believe that if you don’t invest in your buildings now, it’s going to be really hard to compete in this current climate, and even more so because you don’t have the strong demand seen pre-pandemic on your side,” Lee says.

With capital expended on upgrades across its Melbourne CBD assets, Riverlee identified the current pandemic market as a prime opportunity for the refurbishment.

With refurbishments at 10 Queen Street and 179 Queen Street, and an entire level of lettable space added atop 379 Collins Street in addition to the building’s new end of trip facility, the fast-tracked works are a strategic initiative that also seeks to minimise disruptions for tenants in the buildings as many temporarily work from home during lockdown.

“We’ve got 20 to 30 refurbishment projects running at the moment in the CBD and beyond. We’ve just completed two major end of trips and another one is commencing next week. We are also investing a lot in our lobby spaces to make them more dynamic meeting places for tenants. This includes additions like coffee concepts and activating the spaces with communal areas.”

“Tenants expect us to pull back on capital expenditure at a time like this, but we’ve probably gone harder than ever. This gives them great confidence that we’re investing in our buildings for the long-term as we continue to maintain our positive relations with tenants,” says Lee.

With the tenant market tipped to continue strengthening as the vaccine rolls out nationally, Riverlee’s capital expenditure and value-adding outlook represents a unique sense of foresight, securing the loyalty of its tenants and stakeholders.