Melbourne developer Peregrine Projects has received approval for a $95 million commercial precinct in the city's emerging office hub of Collingwood.
Peregrine Projects managing director Joe Chahin told The Urban Developer its green lit “Langridge Lanes” development would position the suburb as an alternative to the booming fringes like Cremorne and Richmond.
“Most people talk about Cremorne as the Silicon Valley of Australia—I've always had the view that Collingwood resembled the traits of Williamsburg in New York.”
Chahin, who has spent the last decade between Australia and the US, saw an opportunity to emulate the commercial boom conditions currently being seen in the hip Brooklyn suburb east of Manhattan.
Peregrine's Collingwood development, designed by Jackson Clement Burrows, will comprise a 6,000sq m nine-level building known as 88L and a 2,000sq m seven-level building called 23W.
The 88 Langridge Street site will hold three street frontages and is bordered by neighbouring Peregrine developments which have been built over the last 15 years.
Chahin said Peregrine initially sounded out the site 20 years ago but its strategic purchase in 2017 would enable the developer to tap into the high demand for bespoke office space in the city's fringe suburbs, with many tenants jostling for tightly-held CBD sites.
Over recent years a shortage of suitable sites for commercial development has pushed the CBD's vacancy down to 3.2 per cent, with many tenants unable to find the amounts of space, particularly contiguous areas, which they need.
Limited stock has meant good news for developers who, for decades, have been trying to shift jobs into the suburban areas of major cities in an effort to break up costly congestion in the centre.
The commercial precinct will offer larger 1,000sq m floor plates at 88L, catering to larger corporate tenants, while 23W will target tech-start ups with 250sq m floorplates.
In a sign of confidence in the fringe market Peregrine has tapped into the rampant co-working sector, which has been growing across Australia's capital cities since international operators such as US giant WeWork entered the market in 2016.
The developer has secured co-working hub CreativeCubes as the anchor tenant for its 88L building, with the hot desk provider taking 3,000 square metres across 10 years with two further 5 year terms.
CreativeCubes, which will take the lower three levels of the building, has emerged rapidly with four locations across Melbourne and plans to roll out six new hubs over the next 18 months.
Another portion of the site, at 60 Langridge Street, was sold by Peregrine in 2017 to Tribe Hotels, a collaboration between the Smorgon and Tarascio families.
Tribe, which first opened in Perth in 2017, was last year purchased by global hotel operator Accor, which has plans to roll out more than 50 of the modular hotels around the world—one of which will be a 187 room hotel in Collingwood.
“We are not hotel operators, but we were very interested in getting the right people into the precinct,” Chahin said.
“After a very quick deal, we have worked very closely together with Tribe Hotels to assist them through the planning phase, shared a lot of the costs and will now commence construction at the same time after both gaining planning outcomes.”
Builder Hacer will commence construction next month with the hospitality and commercial precinct due for completion in the final quarter of 2021.