In brief: Sydney B-grade rents sky high
Core B-grade office rents in Sydney’s CBD have reached a record $1000 per square metre as the city’s vacancy squeeze continues.
Savills research shows Sydney’s core vacancy is at just 3.8%, with stock withdrawals and a lack of new supply driving prices skyward.
Savills national head of office leasing Rob Dickins says recent deals include Ashe Morgan taking 287sqm at 139 Macquarie St for $1170 per square metre, while at 151 Macquarie St, Harrington Properties has taken 294sqm at $1400 per square metre.
“Rental growth is most commonly a factor of supply and demand and at the moment with the Metro resumptions and change of use of several buildings we have the ‘perfect storm’ to push rents in B-Grade to where they have never been before,” Dickins says.
“In this case the demand has been for smaller suites of up to 400 square metres in the CBD core, where scarcity of availability and quality is creating competitive tension of the like we have never seen before.”
Melbourne: Victoria’s largest co-working space opens
Co-working giant Hub has opened Victoria’s largest co-working space in Melbourne’s Mail Exchange building, less than five months after leasing 3900sqm at the heritage-listed icon.
The building on the corner of Spencer and Bourke streets celebrates its 100th birthday next year and has been reformatted to accommodate 700 co-workers, as well as a gym, cafe, bike parking, meeting rooms, relaxation space, media room and a 100-person event space.
Hub’s deal will see it occupy the building until at least 2026.
The company’s CEO Brad Krauskopf says the size of the venture, labelled Hub Southern Cross, is indicative of how far co-working has come.
“We are privileged to be at the forefront of the coworking evolution, helping our members and their businesses grow, and we look forward to seeing this continue in a new business home at Hub Southern Cross,” Krauskopf says.
Melbourne: Private investor grabs Bentleigh Vinnies outlet
A retail store leased to charity group St Vincent de Paul in Melbourne’s south has sold for more than $2 million.
The 250sqm on Centre Rd in Bentleigh was the subject of heated competition at auction, with six bidders pushing the price to $2.025 million – $350,000 above its reserve.
Fitzroys agents Chris Kombi and Mark Talbot sold the property on behalf of vendor Ninetieth Ecstasy Pty Ltd, with a three-year lease in place with a further two three-year options.
“The fundamentals of location, calibre of tenant and growth potential were the main drivers behind the strong interest in the offering,” Kombi says.
“The property’s location next to the new Bentleigh Railway Station, which is part of the State Government’s $5 billion level crossing removal initiative, was also a positive factor for investors,” he said.
Melbourne: Hot competition for Blackburn office
A small office in Melbourne’s eastern suburbs sold on a tight 3.7% yield at auction, underlining the demand for suburban office assets.
The office at 1/45 Railway Rd in Blackburn fetched $520,000 from a local private investor after the property triggered interest from numerous groups, including self-managed super funds and owner-occupiers.
Selling agents, Teska Carson’s Tom Maule and Matthew Feld, sold the property subject to a monthly tenancy.
“This was an opportunity to acquire an office in a tightly held and sought after precinct and the price at a building rate of $5000 a square metre reflected that,” Maule says.
“We took a lot of calls pre-auction and ultimately many of those people attended with strong bidding from the five bidders.”
Sydney: Foreign buyer snares industrial facility in city’s west
An offshore investor has paid $7.3 million for a prime piece of Western Sydney industrial property.
The 20,120sqm site at 239-251 Woodpark Rd in Smithfield features a 100m street frontage and a 5169sqm warehouse, leased to an ASX-listed tenant for the next seven years.
CBRE’s Elijah Shakir and John Karlovasitis negotiated the sale on behalf of Mustera Property Group, with Shakir saying Smithfield property of size are both rare and highly sought after.
“The opportunity to purchase an asset of this nature and price range is not readily available in metropolitan western Sydney,” Shakir says.
“This style of asset performs extremely well when available for lease.”