Melbourne Stock Watch – When’s The Best Time To Move Offices In Melbourne?

February 4, 2019 | Commercial Real Estate

Image of the Melbourne CBD | Melbourne stock watch article

The Melbourne market is tight at the moment. Demand levels are high and there are low vacancy rates. That means landlords are also generally offering low incentives. It also means that it’s probably not a great time to be looking for a new office space.

But when is a good time?

Melbourne’s employment levels are expected to remain strong for the next few years, so the ‘tight market’ situation isn’t likely to change for a while yet. But a smart thing to do is to look at new stock that’s going to become available in the market during this time. When there’s more stock in the market, it’s a better time to renegotiate your current lease terms or to look for better options.

It’s all about supply, demand and market knowledge.

Upcoming stock

There’s plenty of new stock being injected into the Melbourne market over the coming years. But a lot of it is already pre-committed (even though construction has not finished). This is especially true for the CBD, which is likely to push more new tenants to the fringe.

Here’s a snapshot of developments currently under construction in the Melbourne CBD. Notice that four of the 12 developments are already fully pre-committed with tenants, while another three have more than 50% of their spaces pre-committed.

Image of one of Melbourne's famous laneways | Melbourne stock watch article

Fully pre-committed

  • 271 Spring St
    • 15,600 sqm
    • 100% committed (Australian Unity)
    • Completion expected in Q1 2019
  • 130 Lonsdale St
    • 55,000 sqm
    • 100% committed (Cbus Super, Vanguard, Telstra Super, the Uniting Church)
    • Completion expected in Q1 2020
  • 311 Spencer St
    • 65,500 sqm
    • 100% committed (Victoria Police)
    • Completion expected in Q2 2020
  • 405 Bourke St
    • 63,000 sqm
    • 100% committed (NAB)
    • Completion expected in Q2 2021

More than 50% committed

  • 839 Collins St
    • 38,000 sqm
    • 70% committed (ANZ and WeWork)
    • Completion expected in Q2 2019
  • 447 Collins St
    • 49,000 sqm
    • 80% committed (King & Wood Mallesons, HWL Ebsworth Lawyers, Gadens, MinterEllison)
    • Completion expected in Q1 2020
  • 477 Collins St
    • 55,000 sqm
    • 69% committed (Deloitte, Norton Rose Fulbright)
    • Completion expected in Q2 2020

Other buildings

  • 276 Flinders St
    • 5,000 sqm
    • Undisclosed commitment levels at this stage.
    • Completion expected in Q1 2019
  • 80 Collins St
    • 43,000 sqm
    • Undisclosed commitment levels at this stage, but confirmed tenants include Macquarie Group, Savills and McKinsey
    • Completion expected in Q1 2020
  • 140 Lonsdale St
    • 15,000 sqm
    • Undisclosed commitment levels at this stage, but Charter Hall is a confirmed tenant.
    • Completion expected by Q1 2020
  • 180 Flinders St
    • 20,100 sqm
    • 38% commitment (including John Holland)
    • Completion expected by 2020
  • 697 Collins St
    • 50,000 sqm
    • 44% commitment (including Energy Australia)
    • Completion expected in 2021

Keep an eye on these and any other new developments that may come up. It’s never too early (or a waste of time) to explore your options and plan for the future.

Image of Flinders Street Station in Melbourne CBD | Melbourne stock watch article

How can we help you

Our team at Tenant CS provides independent tenant representation services to our clients. We have the market knowledge to help our clients source the perfect office space for their needs. We also help them to negotiate the best possible lease terms and conditions.

This is more important than ever in today’s tough Melbourne market. So, contact us today to find out how we can help you!

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