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Race is on to secure long WALE office investments in Melbourne’s fringe market

Jess Freeman • 10/06/2022

6-Gladstone-St-HeroImage: 6 Gladstone St

Since 2018, the average capital value for fringe office transactions have been increasing year on year, demonstrating the growing appetite and desire for Melbourne fringe office assets; a market which has enjoyed a record-breaking year by attracting close to $1.2Bn worth of capital in 2021, a total greater than any prior year.

According to Cushman & Wakefield, in 2021 capital into Melbourne’s fringe outperformed the CBD for institutional grade office sales ($50m - $300m) and approximately $1.3Bn was invested in Melbourne’s fringe compared to $737m in the CBD, representing a 63% to 37% split.

In light of this, a landmark commercial investment property leased to longstanding tenant, the Australian Tax Office (ATO) and recently committed tenant, Honda is set to hit the market. The offering boasts a secure income stream in one of Melbourne’s thriving inner metropolitan locations.

Located at 6 Gladstone Street, Moonee Ponds, the immaculately presented, institutional grade seven level office building with scope for immediate upside offers a Net Lettable Area of 20,021sqm on a 5,345sqm site with basement parking for 88 cars and is for sale through Leigh Melbourne, Nick Rathgeber, Josh Cullen and Mark Hansen of Cushman & Wakefield.

According to Leigh Melbourne, the property was purpose built for the ATO, the anchor tenant since the building’s completion in 1992 and have recently committed to another 10-year lease, taking occupation out until April 2032, bringing the building’s WALE to 8 years.

“The ATO has a strong track record for renewing multiple terms in one place of occupation and extensive refurbishment works have taken place throughout the ATO tenancy and common areas, updating this institutional grade office building with scope for immediate upside”.

Nick Rathgeber said The Federal Government has an ongoing commitment to the decentralisation of jobs to support greater metropolitan and regional areas and Moonee Ponds has been designated a major activity centre and aims to provide a suburban focal point for services, employment, housing, public transport and social interaction.

A 100% freehold interest for 6 Gladstone Street is offered for sale via international expressions of interest Wednesday 20 July 2022 at 2pm (AEST).

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