Cremorne touted as Victoria’s ‘Silicon Valley’
Major technology firms and edgy start-ups are flocking to Richmond and Cremorne as companies hunt for creative locations outside of Melbourne’s CBD.
The suburbs are being touted as Victoria’s Silicon Valley, with tech companies including SEEK, CarSales.com and Realcommercial owner REA Group already major tenants.
An increasing number of small businesses are also utilising co-working spaces in the area.
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According to CBRE’s latest Viewpoint report, The Evolution of Richmond and Cremorne, companies are drawn by the characteristic buildings, accessible transport and creative atmosphere of the precinct.
Reasearch manager Anne Flaherty says tenants want locations in tune with the hip start-up culture.
“Technology and co-working firms are less likely to identify with the polished corporate culture associated with the Melbourne CBD,” Flaherty says.
“Instead these companies are looking to occupy buildings with character – for example, industrial heritage buildings that provide a distinct branding opportunity.
“Companies are increasingly focused on attracting and retaining the best talent and as a result are often willing to pay higher rents for a location that appeals to employees.”
The trend has already caused rents in Richmond and Cremorne to rise, increasing by 20% during 2016-17.
The growth is outpacing South Yarra and South Melbourne, which have previously been the city’s top choices, and is set to continue with expectations of 3000 more jobs to be created in the hub every year for the next 15 years.
“Cremorne has to be one of the most talked about office precincts in the country among occupiers,” says CBRE Melbourne middle markets director Scott Orchard.
“Evidence of this is not just in the rental growth, but also the leasing pre-commitments and the high number of planning approvals submitted by developers.
“The area is also garnering greater international attention, particularly from active Asian capital, which is making up a more significant percentage of enquiry this year.”
Development applications for offices skyrocketed in the in the year up to September 2017, with permits for 202,368sqm either approved or under assessment – a jump of 220% from the previous 12 months.
The average size per development application also rose, from 640sqm in 2013 to over 6,000sqm in 2017.
Land values have doubled since 2015 from $6,000 to $7,000sqm to now over $13,000sqm.