Demand for high quality office space in Melbourne’s inner east continues despite limited new supply paving the way for the market to continue to tighten in the year ahead.
Colliers International’s Michael Darvell and Rob Joyes have recently leased around 2,650sqm of office space at 5 Burwood Road in Hawthorn following strong demand for quality space in the tightly held inner east.
Moores Legal has committed to 1,700sqm on Level 1, commencing Sept 1, while Prensa Pty Ltd will relocate from Wattletree Road in Malvern to 950sqm on the ground floor at 5 Burwood Road. Moores will relocate from Box Hill. Another 1,400sqm tenancy was currently under offer as was a small 350m ground floor area.
Mr Darvell said both Moores and Prensa were looking to upgrade their premises to accommodate business expansion.
Net rents in the building exceed $375/sqm.
“This activity shows that high quality space is leasing well, particularly in the inner east which is a tightly held market at the moment,” Mr Darvell said.
“It comes off the back of 3,300sqm being leased, by Colliers International at the now fully leased 3 Prospect Hill in Camberwell, where net rents all exceed $370/sqm.
“These deals demonstrate strong rental growth in the inner east for high quality refurbished or A Grade office space. Good quality buildings are attracting strong interest and landlords that are upgrading their premises are seeing strong results."
Mr Darvell said while leasing enquiry generally slowed as June 30 approached, good quality stock was still in strong demand.
“The demand is there, but tenants are looking for quality – they don’t want to move sideways,” he said. “With limited new supply and no new buildings due to be completed in the inner east over the next 12-18 months, this market is only likely to tighten further.”