Sydney, 4 September 2013- Melbourne’s strata office market was exceptionally active over the last week, with CBRE City Sales transacting six strata properties totaling $8.4 million in just one week.
CBRE’s Melbourne’s head of strata projects Tom Tuxworth said that low interest rates were the determining factor driving owner occupiers to buy as opposed to committing to new lease.
“The majority of transactions in 2013 have been to CBD tenants taking advantage of the lowest interest rate environment in fifty years,” Mr Tuxworth said.
Sullivan Property, the developer at 517-535 Flinders Lane ‘The Edition’, sold two properties in as many days. Suite 204 sold for $750,000 to an owner occupier currently based in St Kilda with suite 202 transacting the very next day for $600,000 to a tenant already located within the building. Both purchasers bought within their self-managed super fund (SMSF). Mr Tuxworth said buyers are becoming more aware of the benefits of purchasing within a SMSF and the associated tax benefits that come with it.
A private owner-occupier sold Level 1, 271 William Street to a Melbourne CBD lawyer who purchased within his super-managed super fund too.
Drapac sold 601, 140 Bourke Street for $1,348,000 to a Sydney based owner-occupier. The purchaser who was leasing in the east end or ‘Paris End’ of the Melbourne CBD wanted to take advantage of the low interest rate environment (the lowest in five decades).
“Buyers are becoming aware of just how affordable it is to own commercial property in the Melbourne CBD. Strata titled property offers business owners and investors the opportunity to purchase within the CBD at an affordable price point,” said Mr Tuxworth.
Lend Leases development in Victoria Harbour 838 Collins Street ‘Lifestyle Working’ is now 87% sold with six offices totaling $3.1 million transacting in one line to an offshore investor. This transaction was followed by the auction at 115 Hardware Street which was sold by a local investor to another local investor for $1.509 million. The property had 88 bids from 6 genuine buyers.
Mr Tuxworth said that his team was not surprised by the number of sales as confidence continues is returns to the market.
“Enquiry is at levels unseen before with buyers targeting well located properties with access to amenities. For example, the Flinders Lane property attracted numerous enquiries and sold within three days of being brought to the market,” said Mr Tuxworth.
“The record low interest rate environment has triggered unprecedented demand for well-located CBD commercial strata property. In fact, in some instances it is now cheaper to purchaser commercial property than to sign a new lease.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.au.