This surging demand reflects Melbourne’s strong market fundamentals, including a rapidly growing population, strong economy, liveability and a consistently expanding workforce.
With much of the CBD’s new supply already pre-committed, and the workforce only set to grow in the coming years, the market shows no signs of cooling anytime soon.
According to the Property Council of Australia (PCA), Melbourne’s CBD is forecast to grow from 317,500 workers to 480,400 by 2036, resulting in a projected need for an additional 4.4 million square metres of commercial floor space.
Fuelling this employment growth is migration, from both overseas and interstate, an increase in new companies being formed and existing companies seeking larger office space to attract and retain top talent.
PCA Victorian executive director Cressida Wall says Melbourne remains the nation’s highest-performing commercial market.
“Melbourne has a sustained period of strong demand and boasts the lowest vacancy rate amongst all of Australia’s CBDs,” said Wall.
“Over the last six months, 98,758 sqm of space was added and 42,134 sqm was withdrawn.
“To 2021, Melbourne CBD will supply over 480,000 sqm of new stock. Pre-commitments for this future stock sit at over 55 per cent.”
This continued growth will see these favourable CBD market conditions continue as supply remains constricted in the short-to-medium term.
For commercial property holders, that means now is a good time to negotiate favourable terms and secure long-term contracts with your tenants who will be eager to secure their tenancy in an ever-tightening market.
As one of Melbourne’s leading commercial property leasing and sales advisory firms, CVA is on hand to help you leverage the current market and make the most of your investment. For more information, please contact us on 9654 2311.