This article is from the Australian Property Journal archive
DEAGUE Group has put a brand new inner Melbourne office building to the market, hoping for more than $200 million after fully leasing the entire 16,000 sqm speculative build.
The listing of 101 Moray Street in South Melbourne follows Southern Cross Austereo signing a 10 year lease over 3,000 sqm, joining recent tech signees Adobe, Ooh! Media and Debit Success, as well as co-working venue operator The Commons, and taking the building’s weighted average lease expiry to over six years.
The price guide reflects a cap rate of approximately 5%.
Designed by architects Rothelowman and built by Hutchinson Builders, the eight-storey building includes unique wrap around balconies on levels three, five and six with views of Melbourne’s CBD, and offers amenities including basketball courts, a golf simulator and Australia’s first NeuroPOD station.
“In 2017, Deague Group committed to speculatively building what we believe is the highest quality and most modern building in Melbourne. Our conviction about the Melbourne leasing market and specifically South Melbourne has been validated by very successful leasing outcomes, with the building now almost fully leased to various big brand tenants,” Deague Group CEO, Will Deague said.
“We have had many approaches to sell, particularly recently, but given its quality it is not something we want to sell off-market. It is a truly unique new-age building, and we want all active investors to see and have the opportunity to purchase.”
Cushman & Wakefield’s Nick Rathgeber, Leigh Melbourne, Josh Cullen and Mark Hansen have been appointed to manage the expressions of interest campaign.
Rathgeber said acquisition willingness and pricing in office campaigns is “back at 2019 levels”.
“COVID-19 really slowed down institutional-grade office investment supply in Melbourne, which has naturally created significant pent-up demand from a deep list of buyers from all origins globally. We expect a building of the profile and quality of 101 Moray Street will attract a lot of this demand.”
In the eastern fringe market of Richmond, Fortis has shown it is backing demand for inner city offices with the addition of a 1,850 sqm site in Cremorne to its development portfolio, with plans for a new $130 million commercial building.
Australia Post confirmed last week it will become one of the first multibillion corporations to move out of Melbourne’s CBD post-COVID in favour of the city fringe, agreeing to anchor a new $130 million Charter Hall office complex in Richmond.
According to the Property Council, an estimated 350,000 sqm of office space was added to Melbourne’s CBD market over 2020, with an additional 390,000 sqm of space forecast to enter the marker over the next three years.
Over the same three-year period an estimated 270,000 sqm of city fringe space is also anticipated to enter the market.
