New projects fill up amid transition to inner suburbs

By on June 14, 2022 0

“We want to be one of the first to bring a major office building to this market,” Gattino said at the time.

Since then, the long-talked-about redevelopment of the neighboring Jam Factory project, which was to have 50,000 m² of office space, has been redeveloped with the office portion reduced by more than half.

Peripheral market of the city

“We’ve seen a huge surge of interest in 627 Chapel Street since the start of the year, as workers return to their offices and business leaders look to the year ahead,” said Mr. Gattino.

Colliers’ agent, Travis Myerscough, said leases at 627 Chapel Street were in the $600 per square yard range, “among the highest rents in the city’s outlying market.”

“Some tenants are moving out of the CBD, some are moving from B-level offices on St Kilda Road and demand is also being driven by executives who live nearby,” said Mr Myerscough, who rents the building alongside colleague Matt. Cosgrave, and Robbie Douglas and Sam Torrance of JLL.

Developer Peregrine Projects, led by Joseph Chahin, is also benefiting from demand for offices outside Melbourne’s CBD.

He has boosted occupancy to 92% at his 6,000 sq m project under construction in Collingwood, after securing the Swisse vitamin and supplement brand at levels 6 and 7.

Swisse joins Aesop, Providoor and Creative Cubes as tenants of the Langridge Lane building known as 88L. Matt Cosgrave and Damien Adkins of Colliers are the rental agents for the project.

At the larger end of the city, AMP Capital secured key leases in three of its main CBD buildings in Sydney and Melbourne.

In the largest deal, international trading firm IMC Financial Markets has signed an eight-year lease for three floors of 5,740m² at Quay Quarter Tower, bringing AMP’s flagship building occupancy to over by 95%.

Nearby, at Angel Place, a 35-story Class A tower, flexible workspace provider The Executive Center (TEC) has entered into a 10-year lease for 1,655 sq m on Level 17.

TEC is also expanding to Collins Place in Melbourne, where it will set up a co-working space on the 30th floor over 1,682 m².

It will undertake extensive developments in both buildings, including cafes, breakout areas, private office suites, coworking lounges, meeting rooms and event spaces.

“As the post-pandemic recovery continues, we are seeing increased demand for our flexible workspace solutions from companies embracing an agile and responsive work strategy,” said TEC Country Manager Robert How.

Christina Malcolm, leasing director at AMP Capital, said inquiries about the corporate leasing market were improving in Sydney and Melbourne.

“We are seeing and increasing the appetite for well-positioned retail space, particularly in the eastern Melbourne CBD corridor,” she said.