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Following the country’s harshest lockdowns and one of the highest rates of residents leaving for more rural lifestyles, inner-city Melbourne office life appears to be regaining strength, with the commercial market finally feeling the fruits of the returning labour force.
Daniel Wolman, Colliers’ head of investment services in Victoria, has said that this year has seen a strong return for the inner city across commercial divisions.
“Property decisions that were paused for the past two years are now being actioned with increased confidence in the economic environment based on strong transactions which occurred in 2021. And we are witnessing significantly increased interest from offshore buyers given the easing of travel restrictions,” he said.
But it’s not all business as usual. With staffers’ expectations having shifted following the remote-work revolution that COVID ushered in, businesses wishing to cultivate an energetic office life are increasingly eyeing prioritising convenient, state-of-the-art propositions.
Value-add commercial properties, where buyers have the ability to unlock value in the short to medium term, are apparently, therefore, becoming highly sought after in the current market, with buyers looking to acquire properties they can adapt to meet new needs.
And Mr Wolman noted that the South Melbourne commercial development market is particularly on the rise, with this inner-city location offering a great opportunity to cultivate the type of office and retail facilities now being prized by tenants, at only a stone’s throw from the central business district.
“The unparalleled lifestyle, amenity and connectivity to the CBD positions South Melbourne as one of the most in demand city fringe locations for developers. Over recent years, the precinct has witnessed the development of Market Lane at 68 Clarke Street and The Deague Group’s 101 Moray Street project. In the pipeline, 134 Moray Street and Eleven Eastern, 11 Eastern Road, will add to this influx of brand new premium commercial stock,” he said.
“Tenant demands have shifted with occupiers seeking fully functioning workspaces with innovative technology and complementary facilities which will attract their employees back into the office environment on a more regular basis. The flight to quality trend is in full swing among occupiers.”
On top of increased employee amenities, building owners in Melbourne’s inner-city market are also noting that tenants are increasingly prioritising sustainability, and adjusting their requirements to match.
Many older inner-city assets are now requiring significant upgrades in efficiency to meet the new baseline expectations, while some are reaching for the highest possible standards.
Charter Hall and Cbus Property recently announced that significant works to 171 Collins Street – located right across from Melbourne Town Hall in the city’s heart – makes it the latest building in Melbourne to achieve Climate Active Carbon Neutral certification and the first in Charter Hall’s portfolio to achieve this level of certification.
Cbus property had previously achieved carbon-neutral status for a Sydney asset located at 5 Martin Place. The investor now reports its undertaking NABERS Climate Active Carbon Neutral Certification across its entire office portfolio.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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