This article is from the Australian Property Journal archive
MELBOURNE’S Outer East has set a new rent record at $385 per sqm, as blue-chip tenants move into the area as the flight for quality continues in the commercial market.
The Outer East region represents Melbourne’s second largest metro office submarket and boasts emerging and established employment and activity areas, including Mulgrave, Mount Waverley, Notting Hill, and Box Hill.
Colliers alone has secured more than 40 office leasing deals in the area over 2024, with 27 of these deals placed in Mulgrave and its surrounds.
“New A-Grade office space continues to attract tenants as it offers an exceptional value proposition, without compromising on strong sustainability features, secure car parking or premium end-of-trip facilities,” said Kevin Tutty, office leasing director at Colliers.
“Brand new stock in the Outer East can be up to 50 per cent cheaper on a gross annual basis compared to the Inner East, and up to 65 per cent less expensive than city fringe options.”
The successful leasing campaign of 1 Peters Avenue, Mulgrave saw seven tenants secured with terms ranging from five to seven years and rates from $340/sqm to the new record set at $385/sqm.
1 Peters Avenue was purpose built for Nissan in 2019, with a speculative 6,00sqm across three levels, with new tenants including Nab, ResourceCo, Safegroup Automation, Fairhaven Homes, Coloplast, Iveco Trucks, and Drake International.
Colliers and JLL managed the campaign on behalf of CapitaLand.
“Our strategy revolved around meeting the demands of the metropolitan occupier and providing new high-quality fit-outs state-of-the-art building services, an abundance of car parking, topped with one of the best cafes in the area as you enter the property,” said Damien Adkins, office leasing director at Colliers.
The area is underpinned by major health and education infrastructure, with both Monash Medical Centre and Monash University.
The Outer East is nearing 1 million square metres of office space, with an additional 12,000sqm of new supply due as 5 Bond Street in Ringwood reaches completion.
“There is currently around 32,000sqm in projects with development approval; however, these will not likely be delivered before 2027 and may be deferred subject to market conditions,” said Jonathan Mayes, associate director of research at Colliers.
“Enquiry across the Outer East has remained firm during 2024, exceeding the past couple of years, and we anticipate that more cost-conscious businesses will likely support occupancy across the market with relatively robust enquiry being expressed across the medium and smaller occupiers.”
