Sheffield Property Joint Managing Director, Digby Sutherland said 500 Hay Street presented a compelling opportunity not only because of its location, but competitive leasing costs compared to comparable CBD buildings.
Sheffield Property is predicting that developers will be dusting off the plans for a number of new office developments on the city fringe over the next 12 months. However, should developers commence work on a new 10,000sqm build this year, the project would not be complete until 2023. The lack of supply is expected to result in increased rents for the next two years until future projects are delivered.
New office buildings are designed to cater to this change in trends, and landlords are seeking to retrofit existing buildings with new entry lobbies, increased capacity in the end of trip facilities and on floor services that are commensurate with new buildings – however, this is not always possible.
“Its location is ideal, situated in the centre of the Subiaco retail precinct with the train station just 150m down the road and the new Vibe Hotel next door that provides conference facilities, café, and a bar and restaurant,” Mr Sutherland said.
With increased confidence in the resources sector, comes an increased demand for tenant spaces in the CBD and surrounding areas.
Sheffield has been appointed to lease 500 Hay Street which includes contiguous floorplates in excess of 2,200sqm and enhanced technical specifications – design characteristics typically only seen in new builds located in the CBD.
With the State Government securing over 16,000sqm in deals concluded by office leasing specialist Sheffield Property in Q1 2021, the supply of new, A-grade office space with large, contiguous floors has all but dried up in the city fringe.
While the current climate is putting stress on the leasing industry, a glimmer of hope is presented by Sheffield Property with the recent completion of a 10,500sqm A-grade office building in Subiaco.
There is estimated to be 115,000 square metres of available prime grade space in Melbourne’s City Fringe which has been refurbished and/or is under construction to be refurbished. New supply under construction in Melbourne’s City Fringe totals 241,000 square metres, with 68,000 square metres pre-committed.
There is approximately 338,000 square metres of new and refurbished supply forecast to be added to the Melbourne CBD over 2020-2022 with 149,000 square metres (44%) pre-committed.
We also estimate there to be
With a continued reduction in tenant demand likely, vacancy is expected to continue to rise which will result in continued negative effective rental growth in the short term.