October lease fills last office vacancy at 5 Mill Street.
Vacant floors at 5 Mill Street have been re-stocked in a four-year leasing campaign that has overhauled the building’s tenant mix and made it one of the few fully leased B-grade office buildings in the CBD.
The middle tower in the three-building Mill Green complex, 5 Mill Street was reactivated by office leasing agents from Colliers International and JLL.
Colliers International’s Dustin May and Daniel Taylor said the leasing campaign for the 11-storey, 7175sqm building straddled one of the most competitive times in Perth’s office market and included a raft of expiring leases.
In 2013, when demand for Perth office space was falling, 5 Mill Street had a vacancy close to 40 per cent. By 2015 the vacancy had been reduced to 18 per cent and in October, the final vacant space on level six was leased to IT company PrimeQ.
“Mill Green’s owner, GDI Property Group invested in a comprehensive upgrade of the complex and was one of the first landlords to pull the trigger on the breaking up of floor plates and also the use of speculative fitouts to open up the building to smaller tenants,” Mr May said.
“From a building with a mix of multi-floor tenants and some split floors, 5 Mill Street is now home to 33 tenants, including smaller tenants from West Perth and suburban businesses from north and south of the river.
Mr Taylor said tenancies in the building started from 80sqm and smaller tenants had been especially receptive to the convenience of turnkey fitouts.
“The key to their success has been generic fitouts that appeal to a range of occupiers and over time, we expect this upfront investment will deliver higher rent returns and capital valuations,” he said.
“Smaller tenants in general are looking for extra space to accommodate future growth so the other benefit to landlords is that as they expand, they will lease more space in the building they are in.”
A leasing strategy using split floors with speculative fitouts and a mix of clear floors and good quality whole floors with existing fitouts will now be used in the leasing campaign for Mill Green’s main asset, 197 St George’s Terrace where the first speculative fitout, a 250sqm tenancy on level nine was leased within two weeks of its completion.