In each instance, the properties were snapped up by owner occupiers seeking new premises.
A total of 16 parties bid on the three assets – including a range of competing owner occupiers.
CBRE’s Kilner noted; “Rents in Melbourne’s city fringe office market have grown substantially in the past 12 months, rising by 16%. The area’s very low vacancy rate of around 3.5% has driven this growth and has led many tenants to reconsider their options upon lease renewal, when landlords have requested high rental increases.”
The current low cost of debt has been another market driver as have changing employee considerations.
“Many groups that enquired and bid on these properties indicated that it was going to be much cheaper for them to buy, rather than rent, even taking into account associated capital costs,” CBRE’s Mr White said.
“Changing workforce preferences have also underpinned buyer interest. For a long time, the city fringe was regarded as a poor cousin to the Melbourne CBD, however, with the next generation having different work location preferences, many businesses are looking at fringe opportunities and not just because of the lower cost base.”
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