Premium strata offices in high demand as owner-occupiers seek upgrades in Melbourne’s city fringe

Colliers has reported a sharp demand for premium-grade strata offices in Melbourne’s prime city fringe suburbs at the start of 2024, with owner-occupiers driving the majority of sales. In 2023, owner-occupiers accounted for 67% of strata office sales, increasing to 71% in Q1 2024.

These premium-grade strata offices are attracting owner-occupiers looking to upgrade their business premises and stimulate new potentials in a modern, high-quality work environment. The boutique assets offer modern architecture, sustainability, technology, accessibility, and clever designs that enhance the quality of the work environment.

Ben Baines, Colliers’ Director of Investment Services, believes that owner-occupiers will continue to be the leading buyer profile in the strata office market over the next 12 months. “We have seen the trend continue where owner occupiers have looked to upgrade their office accommodation and move into brand new buildings within Melbourne’s premium city fringe suburbs such as Cremorne, South Yarra and Toorak,” Baines said.

Recent sales at Cremorne House, 6 Adolph Street, exemplify this trend. Suite 4.01, a brand new 107 sqm office with a terrace area, sold for $1.5 million to technology company Citysoft. Suite 3.03, a 185 sqm office, sold for $2.5 million to Shades, a window furnishing company upgrading from their previous accommodation in Hawthorn.

Matt Knox, Colliers’ Senior Executive of Investment Services, noted that premium-grade strata offices in prime Melbourne city fringe suburbs are encouraging workers to return to the office by improving their working environment and relocating closer to retail, lifestyle, and hospitality amenities.

A rare opportunity is currently on the market at Level 4, 667 Chapel Street in South Yarra’s tightly-held Chapel Street precinct. The fully-fitted, whole-floor office is the first time the property has come to market in over six years since it was purchased off the plan.

As the scarcity of these emerging premium-grade strata offices continues, demand from owner-occupiers and astute investors seeking stable capital investments is expected to remain strong in Melbourne’s city fringe suburbs.