OFFSHORE INVESTORS DRIVING OFFICE DEMAND IN MELBOURNE
Written on the 16 June 2016
OFFSHORE buyers making their mark in Melbourne are driving growth in the CBD office market, according to Colliers International.
The property group's Melbourne City Sales team has recorded particular interest among Chinese investors and developers looking to establish a physical presence in the CBD.
Colliers International agents Oliver Hay, Daniel Wolman and David Sia recently sold a 450sqm freestanding office and retail building at 318 King Street to a private Chinese investor for $5 million. The property was sold within two weeks of being listed on the market.
Hay says the buyer intended to lease out the property in the short-term, before setting up a premises and owner-occupying.
"We are finding a lot of the offshore buyers, Chinese private investors and developers in particular, are also wanting to set up offices here as well," Hay says.
"A big theme in this sector of the market at the moment is that these purchasers are not just buying development sites, they're buying offices as well, as they're keen to set up a physical presence.
"A lot of these groups traditionally like to buy office space to occupy, as opposed to leasing space. This has lifted demand for boutique office buildings and strata office floors."
Hay says out of the five strata office floors sold by the team over the last two weeks in the Melbourne CBD, half have been sold to offshore investors.
"Melbourne, and Australia more broadly, is a strategic play for these offshore groups, who are looking to establish themselves here for the long term," he says.
"It's not just about one project, it is about acquiring a pipeline of projects and establishing a permanent presence."
An offshore developer also recently snapped up level 2, 21 Victoria Street for $1.395 million to establish themselves in Melbourne.