A “massive opportunity” for the startup sector has been lost after the country’s biggest tech company lost its fight to redevelop the Australian Technology Park, Atlassian head of global real estate and experience Brent Harman says.
An Atlassian-backed group had been in a fierce bidding war for control of the 14-hectare site on the outskirts of the Sydney CBD, but it was announced on Thursday night that the NSW government has awarded the rights to a Mirvac-led consortium.
The winning bid is believed to be worth around $263 million and means the Commonwealth Bank will be the anchor tenant in the precinct.
This is a big loss for Australia’s tech community, Harman tells StartupSmart.
“This is a massive missed opportunity for NSW and it’s incredibly disappointing for the industry,” Harman says.
Atlassian’s bid would’ve seen its Australian headquarters move to the precinct and the creation of a startup hub.
“We approached this right from the start as being not really about us, but about how to help and grow the industry,” he says.
“It was never about the property for us. It was really about how we could contribute to create an environment and sense of place for the industry – for a focal point around which we could build critical mass.
“Comparing that to the CBA, we see a stark contrast with the two, and think it’s a missed opportunity.”
Richard Dale, a member of the Sydney Angels management committee, says having the tech giant take over the ATP would’ve done wonders for the ecosystem.
“It is disappointing to see Atlassian, a proven innovator and leader in the Australian technology scene, miss out on the opportunity to be the anchor tenant,” Dale says.
“Their presence would have given a big boost to having the right kind of culture on site.”
The winning bid
Mirvac will now redevelop the area, with the Commonwealth Bank taking over 93,000 of the 145,000 square metres on the site for its office, which will house all 10,000 of its NSW employees.
There will still be an emphasis on the site being a tech hub, NSW planning minister Rob Stokes says, with 75,000 square metres of floor space to be set aside for “tech and innovation users and startups” and the establishment of a $2.1 million Tech Incubation Fund to “encourage technology startups to locate in the Park”.
“Mirvac and its partners will continue ATP as a technology precinct, and the NSW government has secured ongoing environmental, heritage and access commitments for the Park,” Stokes says.
“Our aspiration for this site is to continue the transformation from dilapidated railway buildings to a growing technology hub.
“Mirvac and its partners have made a commitment to revitalise the existing technology precinct, and the NSW government has secured ongoing environmental, heritage and access commitments.”
The Commonwealth Bank has pledged to maintain a focus on innovation in the area.
“Moving to the transformed Australian Technology Park will put 10,000 of our people in the heart of a growing technology hub, providing us with a significant opportunity to partner and collaborate with universities, start-ups and other innovative companies,” a statement says.
The winning group has also entered in a memorandum of understanding with the University of Sydney to “support digital and creative industries” and potentially house other tech companies on campus.
BlueChilli founder Sebastien Eckersley-Maslin says it’s important these spaces are affordable for early-stage startups.
“Any startup community needs to be centrally located and underpinned by cheap rent in order to increase the random occurrence of meetings between founders, VCs, engineers,” Eckersley-Maslin says.
“If the developments at ATP include cheap, subsidised co-working spaces and event spaces that bring people together then it could help the community.”
Prominent Australian entrepreneur and tech investor Steve Baxter also says this isn’t the ideal result for the startup sector.
“I do think this is a lost opportunity to develop a tech hub that had broad community support,” Baxter says.
“I think the NSW government was trapped into a property tender, that with prior consultation to the startup sector they could have avoided and reached a better outcome.”
Harman says Atlassian’s vision was for more of a vibrant hub than for a big bank’s office.
“From the outside looking in, we wonder how you can create a tech ecosystem while being around effectively non-tech workers,” he says.
“You don’t want to leave the building and feel like you’re stuck in the middle of nowhere. You need to be in the thick of action and that was important to us.”
He says Atlassian wanted the precinct to be beneficial for all members of the community.
“Imagine if a 17-year-old girl had just graduated from high school, then went to the ATP to do uni courses and at lunchtime she was sitting opposite an Atlassian engineer and learning about that,” Harman says.
“Then the next day she could be sitting opposite an entrepreneur running their own startup and learn from their stories.
“These are rich interactions and make it real, that same girl can have real life experiences around what this all means. That’s why we were so keen on creating it.”
But with a huge upcoming public listing in the US, Atlassian will still be fighting for the Australia tech community.
“We’re going to regroup and we plan to bring the industry with us to articulate more clearly to the stakeholders what we need to be successful,” Harman says.
“We’re big believers in the Australian tech industry and in the role NSW can play. We want to continue to grow and invest in Sydney. We need find a way to help the industry grow at a faster rate or we’ll outgrow it.
“We saw the ATP as one lever to pull to help grow the industry – it wasn’t a silver bullet. We still think we’ve got a pretty compelling case, and we’ll continue to talk to the industry.
“We’re not giving up.”