South Melbourne Office Building Sale A Sign of The Times

Posted on 15th February 2021

Unique and well-located Melbourne office spaces are hot property among investors and owner occupiers heading into 2021.

In South Melbourne, a local investor won out from strong competition for a creative office building that attracted more than 120 enquiries.

Fitzroys agents David Bourke and Mark Talbot sold 23 Union Street for $2.89 million on behalf of private owners, at a strong building rate of $8,500 per sqm.

The 340sqm three-level warehouse conversion offered a unique, light-filled space close to the CBD with a rooftop courtyard and views back to CBD. Zoned Commercial 1, it is on a 177sqm site and was offered vacant.

Bourke said enquiry largely came from owner occupiers seeking standalone accommodation and looking for home/office options.

“The COVID-19 period has prompted a reassessment of working arrangements.

“Many businesses are looking to move to city fringe and inner suburban locations to be closer to their home, making it easier to access the workplace and collaborate with colleagues in-person during a period of more flexible working hours and arrangements.”

He said businesses have been looking for spaces as tenants and also as owner occupiers, spurred by low interest rates and high office rents in many locations.

Small to medium enterprises on the lookout for new offices have been seeking premises of between 200sqm and 500sqm in big numbers, Bourke said, and this building was in the sweet spot of that range.

“Investors are very aware and understanding of the demand from businesses for well-located, character office spaces such as this. This was reflected during what was an extremely competitive campaign,” Bourke said.

“South Melbourne is expected to attract more office development and workers as highly accessible inner-city locations become increasingly attractive to businesses.”

Its inner-city location offers easy access via multiple major roads and tram routes.

Talbot said the property’s positioning just moments from the popular Clarendon Street shopping strip and South Melbourne Market was also a major factor in the strong enquiry and result.

“Workers have been increasingly attracted to locations that offer excellent lifestyle amenity,” Talbot said.

“The building is close to the popular Clarendon Street inner-city retail and hospitality strip. Clarendon Street’s historic architecture and unique character are a consistent drawcard for tenants, shoppers and new residents.

“These vibrant precincts are a huge attraction to businesses wanting to attract and retain talent.”