When Colliers published their Office Middle Market Report for H1 2022, their H2 outlook stressed that openings to enter the sector in the latter half of the year would be few and far between for those interested in investing in Melbourne:
“The Melbourne CBD remains extremely tightly held with limited investment opportunities, and whilst a rising interest rate environment will no doubt soften cap rates and create a gap between buyer and vendor expectations.”
Whilst office vacancy rates are expected to remain elevated over the next twelve months, the gradual rise in prime net face rents means that buyers have not been dissuaded from participating in the CBD office market.
Colliers are looking to take advantage of the unfettered enthusiasm for this asset class by offering a boutique 19-storey office development up to the market. The building is set to commence construction in early 2023, and is to be comprised of a total net lettable area of 12,637 sqm.
360 William Street, Melbourne 3000 VIC - Artist interpretation of interior
360 William Street is situated on an elevated hilltop that faces Flagstaff Garden, and is uniquely positioned at the intersection of the legal, biomedical, and growing education precincts in the CBD’s more eastern quadrant.
“360 William Street is uniquely positioned to benefit from major economic and cultural activity,” stated Anna Cavar, one of the Colliers agents marketing the property.
Ms. Cavar is working alongside her colleagues John Marasco, Daniel Wolman and Anthony Barr, and anticipates that occupiers will be clamouring for a piece of this building. "With a high concentration of major social infrastructure already in situ, we expect strong occupier demand for this type of office product.”
360 William Street, Melbourne 3000 VIC - Artist interpretation of exterior
Whilst the Office Middle Market Report H122 indicated that vacancy rates had inflated marginally over the course of the first half of the year, it’s worth noting that September saw more workers returning to the office. The Property Council of Australia’s September Office Occupancy Survey saw day-to-day worker occupancy rise from 39% to 41%. As more workers opt to work from the office, there is an expected downturn in office vacancy as spatial requirements shift.
“Our survey shows people are returning to their offices strongly on peak days, with peak day occupancy reaching... 60 per cent in Canberra and Melbourne,” explained Property Council Chief Executive, Ken Morrison.
“Melbourne’s peak occupancy day increased by 9 per cent from the previous month, which is a positive sign... with warmer weather now upon us and the Omicron wave subsiding significantly, it bodes well for continued momentum in the months ahead.”
Given 360 William Street is set to commence construction next year, with practical completion targeting early 2025, the site is available for purchase via a fund through or take-out structure. For developers looking to get in on the ground floor of a project within one of the country’s most sought-after sectors, 360 William Street is being promoted as part of an international Expressions of Interest campaign, concluding on the 9th of November.
