BURGEONING ACTIVITY IN MELBOURNE’S SUBURBAN OFFICE PARKS
Tightening vacancy rates in the Melbourne CBD and fringe office markets are driving increased activity in and around suburban office parks, with a flurry of recent leasing and sales transactions. A new CBRE review points to particularly strong activity in Melbourne’s east and south-east corridors, as highlighted by major sales in the Tally-Ho Business Park in Burwood East as one example.
Heightened investor and tenant confidence has also spurred a range of proposed development projects, including a mixed-used development at Burwood East on the China Bar site at 380 Burwood Highway.
The project, which recently received VCAT planning approval, will include office accommodation, several levels of residential apartments, improved retail amenity and a new China Bar restaurant.
CBRE Melbourne Middle Markets Director Scott Orchard said; “The China Bar proposal is an example of heightened developer confidence in Melbourne’s suburban office sector, which is being supported by forecast rent growth reversion and improved amenity. This includes newly completed projects such as the Quest Apartment Hotel in Burwood East nearing completion, to cater to the area’s expanding corporate workforce.”
CBRE Office Leasing Director Elise Betts noted that there was limited supply of quality suburban office space following heightened leasing activity in 2018.
This has spurred owners to expand prominent existing business parks such as Nexus Corporate Park in Mulgrave and Caribbean Park in Scoresby, which are respectively controlled by the Tarascio and Spooner families, resulting in new lease deals such as City Holdings’ commitment last month to 4,500sqm of A-grade space at Nexus Corporate Park.
“In tandem, business park owners were increasingly focused on new work environments that offered a high level of amenity and place-making features such as childcare, gymnasiums, wellness features, green space and quality food & beverage offerings,” Ms Betts said.
“We’ve also seen a new wave of enquiry for “value for money” propositions within the City of Monash, as tenants from city fringe and inner markets look for rental relief. Buildings that are readily adaptable and provide a good economic rent are meeting immediate requirements, with particularly strong interest from medical, engineering and hi-tech tenants seeking office space that offers great exposure and can accommodate future growth requirements.”
Another major Business Park in Melbourne eastern corridor is Greenwood Business Park owned by Ouson Group for over 4 years. Managing Director Ryan Ouyang said he was attracted to the property because of the prominent location, exposure and significant land holding.
“Greenwood Business Park is a very exciting proposition as there is great scope to bring this great asset that has serviced the local areas business accommodations needs well in past decades, into the modern day with a broad and modern mixed-use offering. Designed in a way where every aspect helps to compliment the other as occupiers demand a full range of services and amenity at their fingertips” said Mr Ouyang.