Suburban office is moving

With the longer-term trend of working closer to home expected to continue in 2022, some institutions and high-net-worth individuals are getting in early to secure offices in prime suburban locations away from the CBD.

An example of this is the purchase of 1279 Nepean Hwy, Cheltenham, a 3800sqm office building with a short-term lease to IBM for a price to be around $20 million, and representing a yield close to 5%.

Nichols Crowder Director and selling agent, Matt Nichols, said that the property was attractive due to its location and versatility, as well as the large hard stand car park for 120 cars. This creates enormous flexibility to increase the floor plates, increase parking or even add more floors.

Interestingly Cheltenham is becoming an important transport connectivity point keeping in mind;

• The new Southland station;
• The proposed rail loop from Cheltenham to Box Hill;
• The removal of two railway crossings in Cheltenham; and,
• The soon to be completed Mordialloc Freeway, which will connect the area to the

freeway system linking the CBD with the Mornington Peninsula and across to Dandenong.

Nichols went on to say, “Many firms are re-aligning their objectives, staffing and culture to the new business environment post-COVID-19. As a result, more businesses are wanting to be located near their teams, which is good for suburban offices. This is being shown in our transactional statistics for 2021-22, with increases in both sales and leasing in the office sector.”

The vendor of 1279 Nepean Highway Cheltenham, South Haven Group, is a privately owned developer/owner of inspiring commercial and high-end residential property. South Haven focuses on excellent outcomes for tenants, investors and partners, operating in all phases of the property investment and development cycle. South Haven purchased the building in 2004 and subsequently carried out significant refurbishment, securing a long standing multi-national tenant. The opportunity to recycle capital in this asset as part of a strategy to increase its investment portfolio and development pipeline, will see South Haven actively looking for opportunities, while completing current residential and commercial projects in planning stages and under construction.