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Melbourne’s law offices are in high demand, with local firms hard-pressed to find space.
According to Anthony Kirwan, Cushman & Wakefield’s associate director for investment sales, Victoria, the limited supply of strata-titled commercial office buildings in the legal precinct is of significant concern, particularly for the SME community — 80 per cent of the buyers for local strata offices are owner-occupiers and businesses with three to 70 staff members.
Mr Kirwan explained that these business owners have often leased for multiple terms and are now seeking to stop paying rent by acquiring office space in an SMSF or family trust structure and paying themselves rent, which he called “a highly effective retirement and tax strategy”.
In addition, in-office workers have returned to the legal precinct in force, and many lawyers are looking to set up their own chambers and establish a stable commercial asset for their future.
But the area is hard-pressed to meet the demand.
“The precinct only boasts seven strata-titled commercial office buildings, with most whole floors owned within SMSF and family trust structures by long-term owner-occupiers,” Mr Kirwan said.
“The Legal Precinct is one of the most tightly held pockets in the Melbourne CBD, and there have only been four strata office transactions in the past 18 months since COVID, with an average pricing of around $10,000 per square metre.”
Recent sales in the precinct include Level 5, 414 Lonsdale Street, Melbourne, which sold for $1,500,000 for 154 sq m of office space, and Level 12, 256 Queen Street, Melbourne, which sold for $3,500,000 for 312 sq m of office space. Both sales were vacant possessions.
George Davies, Cushman & Wakefield’s associate director for investment sales, Victoria, said he expects demand to continue apace for quite some time.
“The limited supply of strata-titled commercial office buildings in the Legal Precinct is likely to drive prices up in the foreseeable future,” Mr Davies said.
The Victorian capital’s Law Precinct covers an area of approximately 10 city blocks, bordered by William Street, Queen Street, La Trobe Street, and Lonsdale Street. It’s home to several prominent legal institutions, including the Supreme Court of Victoria, the County Court of Victoria, the Federal Court of Australia, and the Victorian Bar.
Many of the buildings in the area are characterised by impressive architecture, with a number of historic buildings dating back to the 19th century. The Supreme Court of Victoria, for example, was constructed between 1874 and 1884 and is a standout example of a neo-classical building.
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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