Melbourne property developer Vicland has commenced construction on its nine-storey office development hoping to capture growing demand for office space in Melbourne’s popular South Yarra precinct.
The speculatively built office development, at 11 Wilson Street, has a $100 million project value with plans to deliver 6,200sq m of commercial space plus ground floor retail tenancy.
The South Yarra based developer snapped up the city fringe site for $12.6 million last year, a precinct that has seen prime rents rise by more than 50 per cent in the last five years.
Vicland’s Bill McNee said the group is heavily invested in the precinct with two commercial projects totalling over 9,500sq m of office underway.
Vicland is also currently working on a mixed-use project on Toorak Road opposite South Yarra Station that will deliver 2,000sq m of office and retail space and 1,000sq m of public plaza.
“Both projects are already under construction... [This] allows us to offer our their commercial and retail tenants a firm delivery date without the risk of a pre-commitment requirement,” McNee said.
Vicland join Melbourne based developer Goldfields in the speculative build space, which recently kicked off a leasing campaign for its $300 million tower at 627 Chapel Street, without any pre-commitments.
Vicland has appointed Colliers International’s Kevin Tutty and Travis Myerscough, along with CBRE’s Anthony Park and Joshua Jennings, on the leasing campaign.
“There is currently more than 190,000sq m of mooted development scheduled to be completed in 2021-2022, with the majority of developments requiring a significant pre-commitment,” Tutty said.
Jennings said a notable increase of enquiries from groups looking to upgrade their office space has been recorded.
“With a 29 per cent uplift from second half 2018 to first half 2019, we are extremely excited to launch this project.”
Melbourne's city fringe leasing market has the nation’s third-lowest vacancy rate at 4.5 per cent, behind Parramatta, and Melbourne CBD at 3.2 per cent.
Vicland is also currently developing a $185 million residential and commercial tower in Brisbane’s fringe suburb of Fortitude Valley.