Melbourne’s middle-market office sector skyrockets in Q1 2021

MELBOURNE, 09 April 2021 – A string of three office investment sales in Melbourne CBD and metropolitan locations in the past week has put all Melbourne’s office investment sales in Q12021 (above $5 million) at $412 million, tracking consistently compared to Q12020 which hit $449 million.

40 Barry Street Carlton, 27 Niagara Lane, Melbourne and 883 Toorak Road, Camberwell were three recent transactions completed in the space of a week.

40 Barry Street and 883 Toorak Road both sold to local Asian investors following Expressions-Of-Interest campaigns whilst 27 Niagara Lane sold during auction.

883 Toorak Road received more than 100 qualified inquires, 30 private inspections and 6 unconditional offers at the close of the sale process.

JLL’s Head of Middle Markets & Metropolitan Investments – Victoria, Josh Rutman said “These sales are a clear indication of the strong pent-up demand for strategically located office properties in Melbourne’s city-fringe, particularly from owner occupiers who are looking to capitalise on the low interest rate environment and secure their future business headquarters.”

“Investors and developers continue to seek out both development sites and existing buildings in and around the Melbourne CBD, buoyed by the strong economic forecasts for Victoria.”

Mr Rutman continued, “Despite vacancy uncertainties, buyers are still pricing office buildings aggressively across all geographies. Owner occupiers remain active due to the record low cost of debt environment and the appeal of standalone buildings in strategic inner and middle ring suburban locations has proven attractive to a range of investors and owner occupiers.”

“Investors and developers continue to seek out both development sites and existing buildings in and around the Melbourne CBD, buoyed by the strong economic forecasts for Victoria. Low volume of quality supply of investment stock is seeing pent up demand drive pricing to new highs,” Mr Rutman concluded.