Melbourne CBD Office Shortage Driving Rental Increase

Property Council’s 2019 Office Market Report confirms a looming shortage of availability in the Melbourne market, with vacancy rates hitting the lowest in over a decade. Driven by a strong state economy and population growth, businesses seeking office accommodation will be challenged to find adequate space in the CBD in coming years, and rental rates will continue to increase.

Major news outlets and industry leaders are reporting that the squeeze will compel tenants to seek alternatives, and city fringe locations will play an important role in providing workplaces.

Essendon Fields, Director, Ben Beck states that shortage of CBD offices requires immediate action and he believes fringe locations such as Essendon Fields will play a vital role in bridging this gap.

“With 20,000sqms of proposed new A-Grade office space in the pipeline, our precinct is well-equipped to meet Melbourne’s office accommodation shortage. Unlike the CBD, which is landlocked by nature, we have 75 ha of develop-able land available to facilitate business growth into the future.

“If we were to compare apples with apples, rent per square metre for CBD office space in comparison to our newest development, ARC (an A-grade office building, targeting a 5-star green star rating) is more than double,” said Mr Beck.

*Graph shows comparison of rent, outgoings and parking of CBD offices (Savills Research – Quarter Time – National Office – Q4/2018) to an A-grade office at Essendon Fields

Since privatisation in 2001, the Fox and Beck families have committed hundreds of millions of dollars in developing Essendon Fields to provide premium business accommodation.

“Aside from providing office space, Essendon Fields also ticks other important boxes for businesses such as parking, public transport connections and an exceptional retail offer all set amongst stunning award-winning landscaping.

“It’s only a matter of time before organisations realise that it makes perfect business sense to consider city fringe locations and the benefits to workers these provide,” concluded Mr Beck.

For more on Essendon Fields latest A-Grade office development, please click here.