Market Insights


What’s New in the Office Space?

Countless questions are currently being posed about what the potential longer-term impacts of the pandemic on the office sector may be, and what challenges and opportunities may arise as a result.

Whilst uncertainty prevails, larger tenant commitments to new space in existing and new buildings are mostly on hold across the Melbourne CBD and metropolitan markets. This has allowed the market to take a pause, re-rate risk and assess what the key drivers for value will be as we transition into a post-pandemic environment – with many office owners starting to look towards the future and how they can ensure their buildings remain relevant and attractive to future tenant demand.

Office investors remain quite active and curious about opportunities both on and off market, with most applying a firmer lens towards tenant covenants and their ability to pay rent as time progresses. Many are keen to ensure that buildings are well placed to respond to the inevitable rise in unemployment by catering for a range of tenancy sizes and business types, and ensuring that the asset’s location remains relevant for certain tenant sub-sectors.

Despite a more prudent approach from buyers, there remains a notable amount of transactional activity in the sub $150 million space, with buyers showing appetite to take on leasing and tenant risk for the right product. Deals are being structured in more creative ways so as to protect the interests of both Vendors and Purchasers, which is requiring a more experienced and patient agency approach.

In talking with our Melbourne Middle Markets operatives, office leasing agents and various clients in the industry, some of the major talking points and questions are as follows:

By talking to major players in the industry, both domestic and international, this interview series addresses many of the above points, while putting current market activity into context as we continue to navigate through these uncharted waters.

Click to watch the series

Please scan the QR code and follow our WeChat channel for more information.
Click anywhere to close.