Mirvac to marry the Butter Factory

Denham Sadler
National Affairs Editor

Melbourne-based tech co-working space York Butter Factory is set to stake a major claim in Sydney, with a large expansion into the Australian Technology Park in partnership with property and construction giant Mirvac.

York Butter Factory, which was co-founded by two Adventure Capital partners, is understood to be on the brink of signing a lease on a giant space in the tech precinct just south of Sydney’s CBD.

InnovationAus.com understands the audacious plan, which would involve bringing in multiple co-working and incubator partners, could involve as much as 15,000 square metres of space.

Australian Technology Park is undergoing a $1 billion redevelopment into a major business and technology hub after the state government tendered the project in 2015. Mirvac won the redevelopment rights in partnership with the Commonwealth Bank, which becomes anchor tenant for the site, encompassing 93,000 square metres.

The Mirvac/CBA bid caused a stir in at the time, having beat a competing plan to build a tech startup hub that was pushed by local heroes Atlassian.

Instead, from 2019, some 10,000 Commonwealth Bank employees will be relocated to the site. However, as part of Mirvac’s deal with the NSW Government, a further 75,000 square metres in the Park has been set aside for tech-related ventures.

York Butter Factory is currently negotiating with Mirvac, and the construction firm keen to bring in tech players to make good on its promise to the state.

The deal would be a massive step up for the company, which started as a 577 square metre coworking space and incubator in Melbourne’s CBD.

York Butter Factory general manager Jason Lim confirmed to InnovationAus.com that there is a deal in place with Mirvac, but did not comment on a move into the Australian Technology Park.

“All I can confirm is that we have a partnership with Mirvac and are really enjoying working with them to-date. We both think there is an opportunity for Australia as a whole to create globally successful startups, and that conversation needs to shift away from Sydney, Melbourne, Brisbane etc to that of Australia,” Mr Lim told InnovationAus.com.

The York Butter Factory founders signaled their intent to move into the Sydney market earlier this year, signing a partnership with NSW-based Tank Stream Labs.

The deal meant that members of either co-working spaces are free to use the other when travelling interstate.

Tank Stream Labs was also rumoured to have been involved in discussions with York Butter Factory over a move to the Australian Technology Park. The rumour was categorically squashed on Monday by Tank Stream Labs CEO Bradley Delamare, who said there was no plan to move from its existing 2500 square metre Bridge Street offices in Sydney’s CBD.

“We are not in any talks with Mirvac or YBF about the space at ATP. It is not in our business plans,” Mr Delamare told InnovationAus.com.

If York Butter Factory does complete the expansion, they’ll be joining deep-tech incubator Cicada Innovations, which is currently based in the precinct.

The university-owned tech incubator – until recently called ATP Innovations – has now worked with more than 200 businesses that have collectively raised more than $260 million.

Real estate in and around Sydney is now the major hurdle facing the local tech community, with the state government’s efforts to overcome this running into significant trouble.

Earlier this month Google pulled out of negotiations to house its local headquarters in the planned tech hub within the White Bay redevelopment, while iCentral withdrew from the Sydney Startup Hub project.

The NSW government has put forward short and long-term plays to provide subsidised space to local tech firms and startups, including a 15,000 square metre hub in the CBD to act as a bridging measure until a huge innovation precinct is established at White Bay.

The founders of Atlassian were also highly critical of the state government’s decision to sell the Australian Technology Park site to CBA and Mirvac for $263 million.

Atlassian itself had put forward a tender for the site to become a major tech hub with the likes of Fishburners and the University of Technology Sydney.

The site is a strong location for a large startup hub, with close proximity to the CBD, public transport and international airport. It is also within walking distance of both Sydney University and the University of Technology, Sydney.

Atlassian co-founder Scott Farquhar said at the time that the decision was a “huge missed opportunity”, and that he doubted it could still be transformed into a tech hub with CBA as the anchor tenant.

“Maybe the government believes there will be a technology park there, but when over half the space is being taken by a bank as a tenant, I’m not sure they’re going to attract people who want to move down there. Startups aren’t flocking to sit next to the Commonwealth Bank. I don’t see how that’s going to be a technology park,” Mr Farquhar said.

But the government is struggling to bring in the large tech players in the city, and real estate is at a premium.

If the deal goes through, it’s a big win for York Butter Factory, with a large space right on the doorstep of the CBD.

York Butter Factory was founded by Stuart Richardson and Darcy Naunton in 2011 and has since grown into one of the leading hubs in the Melbourne startup community.

The founders have recently been outspoken about a need to put city rivalries aside in order for Australia to take on the world, and the deal with Tank Stream Labs was the first step towards this.

“We strongly believe that if interstate governments, incubators, co-working spaces and other stakeholders collaborate we can greatly improve the outcomes for Australian startups. Growing companies need to be able to easily jump from place to place, we’re making that happen,” York Butter Factory general manager Jason Lim said at the time.

Do you know more? Contact James Riley via Email.

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