Commercial office space in Melbourne’s city fringes are outshining the more central CBD markets.
Docklands and Southbank are becoming highly attractive for corporates who are seeking new workplaces that are increasingly energy efficient and that can more accurately reflect modern workplace cultures.
Unlike the central CBD, Docklands and Southbank have the land to construct these buildings as an increasing number of residents choose refurbished buildings in the CBD to live in.
Southbank and Docklands have added 572,000 square metres to office space in the past ten years, the CBD has added 560,000.
And research from Knight Frank forecasts future new supply for the CBD to fall sharply.
They are predicted a 30 per cent drop in new office space in the next three years compared to the 560,000 square metres recorded over the last ten years.
Glenn Lampard from Savills Melbourne gave his thoughts on future development to The Age.
“There is actually more room in the CBD but because of the Docklands competitive cost advantages – cheaper land and so cheaper rents – it is going to be developed until it reaches capacity and that’s why the bulk of development will happen there over the next decade,” he said.
Some of the available CBD office space and St Kilda Road office space has been taken by apartment towers that have been converted from offices.
From June 2012 to June 2013, the CBD living population rose by 5400 people which is a whopping 33 per cent increase.
Examples of big office spaces being converted and being lost to the office market include the former Communications House at 199 William Street, 150 Queen Street and 35 Spring Street.