Strong demand and an easing of the supply pipeline have allowed the vacancy rate to decrease in Melbourne.

Demand has been supported by a high volume of smaller tenant moves (<1,000sqm) and a wave of tenants relocating from fringe markets into the CBD. Domestic lead indicators, such as job advertisements and business conditions remain robust, supporting a solid demand outlook. Although Melbourne is lagging behind the rental dynamics of Sydney, rental returns are expected to continue to improve.

Highlights

  • 172,998 SQM
    Total Lettable area
  • $759 Million
    Book
    Value
  • 7.4 Years
    Weighted Average lease expiry

Outlook

An easing supply pipeline and solid demand fundamentals will underpin a tightening in vacancy and growth in effective rents

Larger finance and business services tenants to expand as demand cycle evolves

Yields are likely to remain under downward pressure as vacancy tightens and rental growth escalates

Property Map

MELBOURNE
PORTFOLIO
Asset
value
Asset
weighting
1 567 Collins Street $ 303.7m 8%
2 Telstra Global
Headquarters
242 Exhibition Street
$ 257.5m 7%
3 Royal Mint Centre
383 La Trobe Street
$ 70.5m 2%
4 800 Toorak Road $ 127.1m 4%