Falling Vacancies, Rising Rents Fuel Demand In Melbourne’s Suburbs

Melbourne-based private investor South Haven Group has secured an office in Hawthorn East for $8.6million, highlighting the sustained demand for suburban office buildings as vacancies continue to fall and rents rise.

Colliers International’s David Minton and Andrew Ryan brokered the deal for the property, located at 2 Hall Street, which has 1,500sqm of lettable space and a 600sqm warehouse, for $4,000 per sqm on land at the close of an expressions-of-interest campaign.

“The campaign generated a significant level of interest from a mix of owner-occupiers, investors and developers who have been seeking Commercial 2-zoned properties, which remain viable against the strong growth of Commercial 1 values in the area,” Mr Minton said.

He said South Haven Group was attracted to the property for its land-banking characteristics.

“The buyer understands the current strength of the local office market and aims to refurbish the asset, which is suitable for large-scale commercial development,” he said.

“There are plans to convert the warehouse into more office space to take advantage of tight vacancy rates and record city-fringe effective rental growth.”