The once-industrial suburb of Cremorne has continued to attract major technology firms and edgy start-ups, solidifying its unofficial title as Australia's Silicon Valley.
The suburb on the banks of the Yarra has undergone rapid urban renewal, fast becoming the most sought-after creative locations outside of Melbourne’s CBD.
Cremorne's former warehouses have become commercial offices for the likes of Tesla, Uber, the Walt Disney Company, Carsales.com.au and REA Group.
The vacancy rate has plummeted below 1 per cent and office rents are now soaring to more than $500 per square metre.
Outlying suburbs such as Cremorne, Collingwood, South Yarra and South Melbourne have been the principal focus points, with developers aspiring to provide modern office space that caters to evolving tenant needs.
The growth, particularly in Cremorne, is outpacing South Yarra and South Melbourne, which have previously been the city’s top choices, and is set to continue with expectations of 3,000 more jobs expected to be created in the hub every year for the next 15 years.
The suburb's growing reputation as a hipster suburb has attracted new office developments including Caydon Group securing accounting software group MYOB as an office tenant at its mixed-use Malt District on the site of the former Nylex silo site.
Large site sales include an 1,180 square metre site at 1-11 Gordon Street bought by developer CostaFox for $12 million February last year and an office building at 44 Gwynne Street which changed hands for about $8.6 million on a five per cent yield.
Online classifieds business Seek is also planning to develop a 19,300 square metre head office in Cremorne while developer Alfasi Group received approval late last year for a nine-storey commercial building at 510 Church Street.
Icon Development's 5,799sq m 600 Church Street development now looks set to be completed by mid-late December this year, a quick turnaround after lodging plans for the site in August 2017.
The diamond-like building, designed by Wood Marsh, was approved in April 2018, with construction commencing soon after in June.
The new building’s site, previously occupied by the low rise Nuttelex warehouse, was purchased by Icon for $6.6 million in August 2016.
“Icon has a long history of developing offices with 600 Church Street being the fifth in the Richmond Cremorne area,” Icon Developments senior development manager Brinn Tavener told The Urban Developer.
“In comparison to previous developments such as the Botanicca 8 in Richmond the main complexity of this project is the detail of the façade by Wood Marsh Architects.”
“For us, 600 Church Street was a standout prominent entry corner into this exciting precinct. It is the perfect spot to work and play, with some of Melbourne’s best restaurants and cafes right on your doorstep.”
Tavener said that the suburb has continued to act a significant hotspot for project development predicting a continued strong demand for office space as more companies seek to relocate from the CBD or St Kilda Road.
“Cremorne is in huge demand because it appeals to businesses who want to create a perfect work-life balance for their employees. Cremorne is a great first choice due to its pre-existing social infrastructure and popular streetscape,” Tavener said.
The developer, which has been based in Cremorne for almost 20 years, aimed to deliver a project that would have a contemporary response with the area’s industrial heritage.
“We wanted 600 Church Street to be a distinctive building that reflected contemporary design.”
“It has the muscularity of an industrial building but it also has the translucency of a cut diamond. It’s double glazed, reflective and highly rated for energy conservation.”
The sought-after project was snapped up with an estimated fully- leased net income of $3.47 million.
The developer is currently experimenting with inter-tenancy stairs that can connect multiple floors to allow for highly adaptable and accessible floor plates able to be subdivided for multiple tenancies and spaces from one to 6,000 square metres.
The crystalline commercial building will now add to Cremorne's reputation as a booming "tech hub", with nearly $2 billion of development under way or approved in the area.