This article is from the Australian Property Journal archive
MORE than 200,000 sqm of development applications were approved or under assessment for projects in the City of Yarra over the 12 months to September 2017, as the suburbs of Cremorne and Richmond establish themselves as Melbourne’s premier city fringe office destinations.
The past week saw an entire 658 Church Street building vacated by Premier Investments leased by 7-Eleven, Starbucks and the Withers Group, who will be moving from their current offices in Mt Waverley.
They will join Seek, CarSales.com.au and REA Group among major firms moving to the precinct, while co-working spaces is further establishing the area’s reputation as Melbourne’s creative tech-hub, according to CBRE’s latest Viewpoint.
Major tenants through the area also include Disney, Tesla, Uber and MYOB.
In the year to September 2017, 202,368 sqm of development applications were either approved or under assessment by the Council, up 220% year-on-year, as the average size per development application rose from 640sqm in 2013 to more than 6,000 sqm in 2017.
Land values have skyrocketed, with the average land rate for development sites has escalated up from between $6,000 per sqm to $7,000 per sqm in 2015 to more than $13,000 sqm currently.
Richmond and Cremorne are cementing their position as Melbourne’s own Silicon Valley hub, as leading technology and start-up tenants continue to flock to the city-fringe precinct.
CBRE research manager Anne Flaherty said an additional 3,000 jobs per annum are anticipated over the next 15 years for the City of Yarra, with the growth driven largely by the arrival of creative and technology office tenants.
“Technology and co-working firms are less likely to identify with the polished corporate culture associated with the Melbourne CBD. Instead these companies are looking to occupy buildings with character – for example, industrial heritage buildings that provide a distinct branding opportunity,” she said. “This type of occupier is also after a location with a strong culture of innovation, plus decent access to transport links and popular hospitality and retail strips.”
Rents across the Richmond and Cremorne area rose by 20% in 2016/17, outpacing other city fringe office markets, while 13,470 jobs were created in the five years to 2016 through the City of Yarra.
CBRE’s Josh Jennings said Richmond and Cremorne had surpassed South Yarra and South Melbourne as the city fringe’s strongest performing office markets.
“Tenant interest is now coming from further afield and not just other city fringe areas, with Cremorne having pulling power from Glen Waverley, Burwood and even Burwood East’s Tally-Ho,” he said.
Australian Property Journal
