Melbourne Fringe Office Figures Q4 2023

February 14, 2024 6 Minute Read

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Key Points:


  • Leasing demand saw mixed performance in H2 2023, with prime absorption outpacing secondary absorption in Southbank. Demand concerns have emerged as declining effective rents in CBD precincts threatens fringe competitiveness.
  • Expected supply is concentrated in Melbourne’s City Fringe and eastern Precincts. There are no major developments currently anticipated in Southbank and St Kilda Road.
  • Vacancy for prime assets remains below secondary grade stock as of H2 2023. Prime vacancy for Southbank decreased 129bps to 16.56% in H2 2023.
  • Face rents across the fringe and suburban market saw mixed movements, with precincts seeing stability or declines. Elevated incentives continue to put downward pressure on effective rents.
  • Office sales in Melbourne’s fringe saw a slight rebound with the sale of 8 Nicholson Street, however total volumes remained significantly below historical levels.
  • Yield expansion continued over Q4 2023 as repricing continued in the face of mismatched expectations.