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Why St Kilda Road sales are charging ahead of Melbourne CBD
MELBOURNE, 28 MAY 2013 – St Kilda Road, Melbourne’s dominant non-CBD office precinct, has been a hive of activity in 2012/2013 with the percentage of total stock transacted more than double the amount transacted in the Melbourne CBD since the start of 2012.
Jones Lang LaSalle Director Sales and Investments, Paul Burns said “since the start of 2012, 18% of total stock along St Kilda Road was traded, compared to less than 8% in the CBD (excluding Docklands).”
According to Mr Burns the St Kilda Road office market has been traded heavily in the past 18 months for the following reasons:• The market is arguably the cheapest (leasing) market in Australia. The gap between achievable rents in St Kilda Road and other markets will inevitably close and many investors have become acutely aware of this potential.• An extremely limited number of properties for sale in the CBD has seen buyers move to other markets, with St Kilda Road satisfying the criteria of most.
“Everything for sale in the St Kilda Road market has been competitively sought, with private investors and wholesale syndicates proving the most active buyers” Mr Burns added.
Some recent sales along St Kilda Road are illustrated below:
Mr Burns said “St Kilda Road is a good alternative market for those investors where cost is closely monitored. Of the 13 deals transacted since January 2012, the price per sqm averages approximately $3,290 compared with 19 CBD sales between January 2012 and May 2013 which averaged circa $5,203 per sqm.”
“The differential is exaggerated by a relatively high incidence of Queens Road buildings which sold at a much lower rate per square metre, however the difference is significant” Mr Burns said.
Several major corporates have relocated from Melbourne’s City Fringe and suburbs to St Kilda Road which has improved the lease profile in the precinct.
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