Traditional residential developers cash in on Yarra's 300,000sqm commercial boom
The sway toward commercial development within City of Yarra shows no signs of slowing, with Urban.com.au tracking near on 300,000 square metres in development.
The intensifying trend continues to attract developers which have historically leaned on residential development. Latest to the fray is H&F Property who is the applicant behind an 11 storey building at Abbotsford's 218-228 Hoddle Street, with a secondary frontage to Stafford Street.
Designed by Architectus, the $25 million application contains 7,389 square metres of space above three basement levels, and was submitted during April.
H&F Property's bid is in addition to a bevvy of traditionally residential developers such as Caydon Property Group, Alpha14 Property Group, Pace Development Group, Beams Projects, Gurner, LK Property Group, Domain Hill Property Group and Peregrine Projects who are in the process of realising their respective first commercial developments, which all happen to fall within City of Yarra.
Add fellow development firms such as Lazzcorp, Alfasi Group, Salta Properties, Riverlee and Grocon who have a hand in active commercial developments within the municipality.
The result is an impressive 34 commercial projects on the go within City of Yarra according to Urban.com.au's Project Database.
Planning agency Human Habitats provides a decisive overview as to why City of Yarra, in particular, is running hot with commercial development:
At a local level, ongoing change in the structure of employment has begun across the City of Yarra in recent years with strong growth in property, business services, retail, and the finance and insurance sectors. This demand for employment has been welcomed considering the decline in wholesale and manufacturing sectors across the City of Yarra.
As traditional office locations such as the CBD and Docklands reach capacity, employment precincts such as Richmond/Cremorne have become increasingly attractive locations for office based employment. This location appears to cater for the continuing growth in small to medium sized business services and the ‘new economy’ employment of an increasingly skilled workforce.
The demand for additional office space is reflected in the effective rental growth in the City Fringe Areas (which include Richmond / Cremorne) which has experienced growth in the order of 20% over the year to March 2018, and which has featured a vacancy rate of below 3.5% for in excess of 18 months.
Real Estate Advisory firm Colliers are predicting that the underlying fundamentals of demand within this area are sustainable, and that demand will remain strong given Melbourne’s promising economic outlook and extraordinary population growth.
Human Habitats
Pace Development Group's expansion into the commercial market is via 51 Langridge St in Collingwood, with the project's end value expected to surpass $25 million.
Planning and Design Manager at Pace Development Group, Michael Holah. touches upon what makes City of Yarra an attractive proposition.
We see this striking a real chord with businesses wanting a contemporary upgrade, those priced out of suburbs such as Richmond and Cremorne, as well as those currently located in a co-working environment that have grown enough to warrant their own office space.
Unlike its CBD counterparts, this project is designed to capture the Collingwood feel and the ethos that the suburb stands for – SJB Architects has conceptualised something truly reflective of both the site’s surrounds and the cultures of the businesses that will grow here.
The smaller floor plates are exactly what the market is looking for.
With yet more projects to be added, the Urban.com.au Project Database tally sees 32 purely commercial projects and 2 mixed use developments listed within City of Yarra. These projects amount to some 292,100 square metres of commercial office space in development.
Only 7 developments are currently at construction and stand to add approximately 41,700 square metres of combined commercial stock, indicating that City of Yarra's commercial boom has some years yet to run.
