Now is the time to buy an office in Docklands
28 Jun 2011
According to industry experts, now is the time to be buying commercial real estate in Docklands.
Melbourne is the darling of the national commercial real estate market and Docklands is the stand-out performer in Melbourne.
Earlier this year the Property Council of Australia identified Docklands as having the lowest vacancy rate in Melbourne with only 2.1 per cent available for rental.
Last month BIS Shrapnel senior project manager Maria Lee told Docklands News her organisation saw a “very positive” short-term outlook for Docklands.
She said supply had been briefly halted by the global financial crisis which meant that in the 2011 calendar year less than 40,000 square metres would be coming on stream in the CBD and Docklands.
“This is virtually nothing,” Ms Lee said.
She said that, as most new stock was pre-committed, a vacancy rate of less than 4 per cent was predicted until at least June 2013.
She said net effective rentals were expected to increase 14 per cent this year and continue in double digits percentage increases for the next few years.
Ms Lee said that, while now was a good time to buy, there would be a corresponding time to sell when supply overtook demand in the second half of the decade.
Most of current development in Docklands is residential or large-scale commercial. In the smaller strata-office area, the only opportunity on the horizon is the Lifestyle Working complex at 838 Collins St.
Stable group developer Ed Horton said: “Melbourne is seeing a distinct shift in commercial development towards the Docklands and in particular, the Victoria Harbour precinct which is now regarded as a legitimate extension of the CBD.”
“The level of pre-commitment in recent times has seen projects get underway, however there is not a lot of surplus space available to accommodate the increasing demand in the market.”
“The Lifestyle Working Collins Street project will contribute to the diversity of Victoria Harbour’s vibrant commercial offering by attracting small to medium business enterprises,” Mr Horton said.
The Victorian executive director of the Property Council, Jennifer Cunich said: “The manner in which the Docklands and adjacent Spencer precinct continues to hold strong shows the master planned community is developing nicely half way into its 25 year plan.”
“The Docklands precinct demonstrates that good planning and vision can result in developing successful master-planned communities with a mix of residential, retail and commercial space.”
“With 10 years to go until the Docklands vision is complete, this new wave of campus style developments with a focus on sustainability shows the Docklands’ vision is becoming a reality.”
Some 105,344 square metres of office accommodation was taken up in Docklands last year, mostly in large floor-plate developments.
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