Former Labor headquarters, Centenary House in Barton could be demolished to make way for $85 million building

An $85 million redevelopment is planned for Centenary House by current owners, real estate investment group, Cromwell Property Group.

Cromwell has proposed to demolish the existing four-storey building and replace it with a six-storey office building more than double the size.

The building at 19 National Circuit was once at the centre of a political storm and the subject of two royal commissions. Built in 1993, it was owned by Labor party entity, John Curtin House Limited.

The entity leased most of the building to the Australian National Audit Office. It was a 15-year agreement with an annual rent increase of 9 per cent and this attracted the ire of the Liberal-National Party.

The coalition accused the ALP of charging excessive rent to ANAO and royal commissions were held in 1994 and 2004.

In 2004, then-health minister Tony Abbott was particularly scathing of the ALP. A transcript from March 11 2004 question time showed Mr Abbott accused the Labor party of a "rent rort rip-off" of $36 million.

"What does the rent rort mean? It means that Labor gets the goldmine and the taxpayers get the shaft," he said.

"We all know that, compared to the rents paid by government departments in the Barton area, the Centenary House deal is a rip-off."

The 1994 royal commission found the rent charged was not excessive but the 2004 commission found it was. Both reports cleared the ALP of any wrong doing.

ALP sold it to Cromwell in 2005 for $35 million. At the time, former prime minister John Howard said the inflated rent had pushed up the sale price.

Centenary House is across the road from the National Press Club and is sited on a block of more than 6000 square metres.

Cromwell said an internal atrium, surrounded by 3200 square metres of office space, "designed to promote inter-floor connectivity and natural light" would be a highlight of the proposed development.

The group said the proposed building would include 225 basement car spaces, along with 136 bike parking spaces. There would be a ground floor cafe as well.

The current building has basement parking of 120 spaces and an outdoor car park with 42 spaces.

Cromwell owns seven office buildings in Canberra, as well as one in Queanbeyan. Cromwell's head of property Bobby Binning said this would add 10,000 square metres of office space to its Canberra portfolio.

"We have been investing in the ACT for 20 years now and we believe this development is well placed to take advantage of the tight Barton leasing market," he said.

"Situated within close proximity of Parliament House and other key federal government agencies, opposite the National Press Club of Australia, and with hotel accommodation located both adjacent to and across from the site, we are very excited about this opportunity."

The public notification period for the development application has not opened.