Colliers International at the forefront of Box Hill’s changing landscape
The landscape of Box Hill is undergoing a significant makeover, as an increasing number of long-standing office tenants relocate within the suburb or closer to the Melbourne CBD to make way for residential and retail development.
Changes to the City of Whitehorse’s height restrictions, in line with the Metropolitan Activity Centre planning scheme, have fuelled the movement, with several developments in the pipeline encouraging tenants to reassess their leases.
Colliers International’s Office Leasing team is at the forefront of this activity, with associate director Kevin Tutty saying businesses were embracing the opportunity to relocate to areas with enhanced amenity, which in turn would boost staff satisfaction levels.
“Tenants who are leaving Box Hill are moving closer to the CBD, along the train line in Camberwell and Hawthorn,” he said.
“Tenants who are staying are moving out of Prospect Street into the refurbished A-grade building at 990 Whitehorse Road.”
Several Box Hill office buildings have recently been sold as residential development sites, including 851 Whitehorse Road, 15-17 Prospect Street, 830 Whitehorse Road, 826F99 Whitehorse Road and 9 Prospect Street.
“This change in zoning is the catalyst for the change in Box Hill’s traditionally office-oriented landscape,” national director for Office Leasing and Investment Services, Rob Joyes, said.
“It has created a snowball effect, with increased the residential development stimulating retail development – more residents need more retail amenity.”
Among the office tenants to move out of Box Hill are Moores Legal, which has relocated to 5 Burwood Road, Hawthorn; Kao Brands to 293 Camberwell Road, Hawthorn; Scope Victoria to 302 Burwood Road, Hawthorn; Navy Health to 601 Canterbury Road, Surrey Hills; and Melaleuca to 123 Whitehorse Road, Balwyn.
“These businesses are willing to pay a higher rent, between $370 and $400 net per sqm, to benefit from the enhanced amenity of the inner-eastern suburbs,” Mr Tutty said.
Tenants staying in Box Hill include Robinson Gill, Kodak and Serco, all relocating to 990 Whitehorse Road and paying between $320 and $350 per sqm.
“As a result, vacancy in the inner suburbs of Hawthorn and Camberwell has dropped to 5.4 per cent, while 990 Whitehorse Road is now at 70 per cent occupancy following the Australian Tax Office’s relocation from the 20,000sqm building,” Mr Tutty said.
Mr Joyes said the gentrification of Box Hill’s commercial landscape was creating a windfall for all parties.
“Naturally, the developers are taking advantage of the new planning scheme,” he said.
Mr Tutty agreed, saying Box Hill’s commercial landlords were benefitting from strong rental growth, due to the lack of supply and increased demand for assets in the area.
“Meanwhile, the tenants are benefitting from refurbished offices and enhanced amenity, which is set to be on par with the CBD,” he said.