Essendon Fields primed to solve CBD office vacancy squeeze

Essendon Fields has illustrated its growing importance in Melbourne’s commercial property market by being included for the first time in the Property Council’s influential Office Market Report, proving it can help resolve the growing shortage of quality office space in Melbourne’s CBD.

The Property Council’s January 2020 Office Market Report released today highlighted that Melbourne’s CBD is struggling to meet demand for quality office space. The inclusion of city edge commercial centres in the report highlights the immediate solution employment hubs like Essendon Fields play in addressing Melbourne’s continuing urban sprawl.

As Melbourne’s CBD total vacancy rate fell to 3.2%, the lowest in Australia, and rents continued to rise, by comparison Essendon Fields has a direct vacancy rate of 5.8% and is increasing stock to meet the growing demand for quality office space in Melbourne.

The Office Market Report showed Essendon Fields has almost 46,000 sqm of available office space across 21 buildings. An additional 19,000+ sqm of new office space is due for completion in early 2021.

Essendon Fields, CEO Mr Brendan Pihan stated: “The inclusion of Essendon Fields in this year’s Office Market Report demonstrates the growing demand of the business community for quality office space outside the CBD.”

“We’ve made a long-term investment into developing quality office projects and Essendon Fields offers a strong competitive advantage when compared to rental rates for offices in Melbourne CBD. For business tenants the appeal is simple; A Grade CBD rents are almost 80% higher ($638 per square metre versus $355 per square metre), outgoings are more than double, and parking is over 4 times the cost. The value proposition is compelling,” said Mr Pihan.

Cressida Wall, Victoria Executive Director, Property Council of Australia reiterated the importance of developing new, quality office space in Melbourne in order to meet population growth and maintain a competitive position.

“It is vital to the ongoing growth of Melbourne as an international city that we continue to develop sustainable and well-designed office space,” said Ms. Wall.

“Getting the policy settings right for planning across the State – and removing unnecessary red tape – will help attract world-class businesses and meet their needs,” she concluded.

A recent sublease vacancy of 6000 square meters at Essendon Fields due to a tenant merger and office consolidation means the physical vacancy rate in the precinct is currently sitting at 19%, however direct vacancy rates in the suburb are under 6%, in line with CBD and fringe locations.

“The way I see it, vacancy equals opportunity, if you’re looking for value and have an immediate need, there is space available at Essendon Fields. To meet demand, we’re also adding over 19,000 sqm of office stock, as well as mixed use office and industrial over the next 12 months,” Mr Pihan said.

“There are a range of other benefits for staff as well, with fantastic amenities and green spaces. Being located just 15 minutes from the CBD and at the intersection of three major arterials also presents a major advantage in terms of connectivity and shorter commutes,’’ Mr Pihan concluded.

For more information on the Property Council’s January 2020 Office Market Report please contact: John Nguyen, National Research Manager, Property Council of Australia.