The JLL Victorian Office Investments team's latest edition of The Office Perspective is now out!
Please contact me on 0415 767 915 / [email protected] or any member of the JLL team if you would like to receive our more detailed weekly updates via email each Monday morning.
- What’s Driving the Melbourne Commercial Property Market?
- Melbourne CBD Office Leasing Market Update
- Feature Listing - CBD Freehold Investment With Endless Upside
- JLL’s New Melbourne Office
- Article of Interest
What’s Driving the Melbourne Commercial Property Market?
Melbourne stands out as a compelling investment destination underpinned by immense population growth fuelling demand across property sectors.
While office headlines suggest weakness, the reality is more nuanced — with strong demand from small-to-medium businesses for high-quality, amenity-rich office spaces.
See below brief summary of JLL's latest report:
- A significant portion of small-to-medium firms are expanding when they move. Since early 2021, we have tracked 138 tenant relocations across Melbourne’s office markets – with 52 of those companies upsizing by over 500 square metres compared to just 36 downsizing by that magnitude.
- As the job market remains competitive, an increasing number of organisations are prioritising premier workplaces to lure and retain top personnel, fuelling rising demand for upgraded space despite hybrid workplace models.
- For private investors evaluating the Melbourne office market, several intertwined themes are emerging as priorities for tenants. Chief among them is a pronounced flight-to-quality, with companies aggressively pursuing higher-end spaces that check all the boxes - premium finishes, amenity-rich environments, and locations offering seamless live-work-play accessibility
- An increasing number of firms are clustering in districts alongside complementary businesses to foster networking, idea exchange, and talent cross-pollination. Many are also making sustainability a prerequisite by enacting net-zero carbon mandates that require energy-efficient spaces. These evolving occupier demands translate into unique opportunities for investors to reposition older, less eco-friendly office buildings through environmental retrofits and renovations that elevate them to the calibre tenants now expect.
- Modernising aging stock can unlock significant value by capitalising on robust demand for high-quality, well-located, sustainable workplaces.
Melbourne CBD Office Leasing Market Update
We provide below recent Melbourne CBD Office Leasing market insights by joint department heads; Nick Drake and James Palmer:
- Decision making remains slow with less than 45% of 500sqm+ occupiers from the last 12 months having made decisions on their future accommodation requirements.
- Initial enquiry levels for occupiers over 1,000sqm has improved.
- 95% of all sub 1,000 sqm deals YTD have been concluded in fitted space (existing & spec suites)
- Limited new sublease availability coming to market, with a large portion of remaining sublease trading at heavily discounted rates.
- The Victorian State Government are currently reviewing their overall CBD footprint, which is likely to decrease significantly over the coming years.
JLL’s New Melbourne Office
The JLL Melbourne office has relocated to Levels 32 and 33, 101 Collins Street, Melbourne. Our new workspace is a testament to JLL’s commitment to providing market-leading property solutions for our staff and clients. Our specialist team has carefully curated every aspect of our new office to meet the needs of our highly diverse workforce.
We would love to show our clients JLL's brand new workspace, so if you are in the city and would like to test out our new in-house barista, please contact any member of our team.
Feature Listing - CBD Freehold Investment With Endless Upside
JLL Melbourne CBD Sales & Office Investments has the exclusive privilege of offering for sale this exceptional Melbourne CBD freehold with strong income and valuable underlying land value within Melbourne’s most active CBD precinct at 301 Flinders Lane, Melbourne.
Key details of the opportunity include:
- A classic freestanding 7-level office building of 4,747sqm*
- Three street frontages totalling almost 100 metres*
- 895sqm* site with untapped future development potential
- The ultimate CBD investment with major upside through rental reversion, retail reconfiguration and future redevelopment (STCA)
- Estimated Fully Leased Net Income: ~$1,850,000 per annum*
- Highly sought after Central CBD location set to benefit from significant surrounding investment
To receive additonal information or arrange a private walkthrough of the building, please contact Josh Rutman (0411 27 37 46), Nick Peden (0402 011 266), MingXuan Li (0498 688 998) or myself at any time.
Article of Interest
The Australian Financial Review - Gurner’s plan to revive Jam Factory site
- Rich Lister Tim Gurner and ASX-listed financier Qualitas have taken full ownership of the famous Jam Factory site on Melbourne’s Chapel Street after buying out fund manager Newmark Capital’s 65 per cent share for about $125 million.
- The deal, which follows the Gurner-Qualitas partnership buying a 35 per cent stake in the project in 2021 for about $75 million, ends Newmark’s near nine-year interest in the two-hectare heritage site.
- Gurner-Qualitas has raised $180 million to fund the land purchase and development of the site.
- The revised Gurner-Qualitas plans for the Jam Factory include 15,000 square metres of commercial office space, more 20,000 square metres of retail, a new Village Cinemas complex, two hotels and four residential towers, with a combined end value of $2.75 billion.
- For Gurner and Qualitas – also partners on a build-to-rent development fund that has raised $3.2 billion – taking full control of the Jam Factory site will allow them to deliver the mixed-use precinct in independent stages, mitigating construction risk.
- Stage one of the project – of which the joint venture partners hope to commence construction at the start of next year (it hopes to secure a permit from the City of Stonnington ‘‘within months’’) – will include 250 luxury apartments and a retail component, with an end value of about $350 million.
- Apartments will be priced from $750,000 up to more than $30 million for penthouses, which Mr Gurner said would take their inspiration from luxury projects like Saint Moritz at St Kilda.
- The revised Gurner plans will retain more of the former preserving factory’s heritage facade than previous proposals, as well as the original Jam Factory chimney – around which will be built a 1800-square-metre public piazza with cafes, bars and restaurants.
We hope you have enjoyed this edition of The Office Perspective. Please reach out to our specialised team if there is anything we can assist you with.
Tim Carr - JLL Victorian Office Investments
