Melbourne developer Tim Gurner has received approval for his first commercial project, a $120 million mixed-use development offering 6,000sq m of office space.
Gurner will retain ownership of the building in Fitzroy North, as the developer looks to diversify its portfolio by holding on to long-term assets that generate annual returns.
The mid-rise building comprises half and full-floor tenancies ranging between 1,000sq m and 2,000sqm, 110 serviced apartments and a 1,687sq m supermarket.
Gurner is developing the 81-89 Queens Parade land parcel with a partner who acquired the site in 2015 for $15.5 million.
The rich lister says the project will complement his “robust” residential development arm.
“We see this as an opportunity to expand our portfolio with assets that allow us to retain ownership and complement our residential arm with another asset class that delivers long term financial returns,” Gurner said.
Leasing agent Phil Cullity says the 3,300sq m site is located to draw interest from tenants being pushed out of the CBD and tenants that are seeking to upgrade from the nearby Cremorne and Collingwood office precincts.
“Our leasing strategy has sought to identify and target a number of expanding sectors where businesses don’t necessarily want to move into the CBD, so our primary focus will be across sectors such as IT, Government, insurance, co-working and education providers.”
With limited development supply in the short to medium term, Melbourne’s CBD vacancy rates has shrunk to as little as 3 per cent – pushing tenants into fringe office markets.