This trend marks a watershed in the evolution of the Melbourne office property market, as the dynamics that affect the demand for office space have pivoted 180 degrees to now reflect the needs of the end user, the employee.

With the local economy booming at a point in time when less people are choosing to work full time, the ability to lure and retain quality staff has become more important than ever, and employers are responding by being more in-tune to staff needs and seeking out office locations that provide outstanding amenities and convenience.

In an increasingly competitive business world, tenants who undertake this corporate flight to amenity-rich inner city fringe areas are not just addressing an immediate commercial need; they are also future-proofing their organisations.

As an illustration of this, Australia’s largest home entertainment retailer – the JB Hi-Fi Group – recently committed to 9,500 square meters of office space at IBM Tower within the landmark Southgate Complex in Southbank.

The relocation, which is due to be completed in the first half of 2019, is a result of JB Hi-Fi’s recent acquisition of consumer electronics retailer The Good Guys and reflects the parent company’s desire to centrally locate both businesses in a new headquarters within Chadstone shopping center which is one of the five largest shopping centres in the world.

Above: Melbourne

The Good Guys are currently based in the middle northern suburb of Essendon Fields, a reflection of the business’ origins having initially set-up shop in Essendon in 1952. The relocations then mark a quantum shift in priorities for the JB Hi-Fi Group, one that shows the company has staff’s needs in mind.

The JB Hi -Fi and Good Guys deal is just one example of the current trend of suburban occupiers moving to more amenity rich locations, typically in the inner city fringe or CBD.

Along with the aforementioned Southbank area, in the last few years the city fringe suburb of Cremorne has transformed into a tech hot-spot.

These days referred to as Melbourne’s ‘Silicon Yarra’, big name tech brands such as Seek, MYOB and Carsales have all shifted or are in the midst of shifting to Cremorne, and as a result land values in the suburb have more than doubled in the past three to five years with A grade rents now pushing upwards of $500/sq m.

Cremorne’s amenities, public transport and ‘eclectic edge’ are seen as major drawcards for young workers, and employers are clearly taking note. The demand for inner city fringe office space is now seeing suburbs beyond Southbank and Cremorne becoming increasingly sought after.

With office vacancy hitting a record low in Melbourne’s CBD, and rents on the rise in Southbank and Cremorne, tenants are finding they cannot afford the asking rents in these areas, and as a result are being pushed to up-and-coming fringe areas such as Abbotsford (inner east) and West Melbourne (inner west).

With Melbourne’s population tipped to surpass Sydney’s in the not too distant future, it is likely we will see more and more inner fringe suburbs transformed into viable commercial precincts, as developers and planning authorities respond to the shifting pattern of demand in Melbourne’s city fringe in order to capitalise on the location’s strong inner city amenities and public transport.

Currently JB Hi-Fi is located in the outer eastern suburb of Chadstone, their head office strategically located within Chadstone shopping center which is one of the five largest shopping centres in the world.

The Good Guys are currently based in the middle northern suburb of Essendon Fields, a reflection of the business’ origins having initially set-up shop in Essendon in 1952. The relocations then mark a quantum shift in priorities for the JB Hi-Fi Group, one that shows the company has staff’s needs in mind.

The JB Hi -Fi and Good Guys deal is just one example of the current trend of suburban occupiers moving to more amenityrich locations, typically in the inner city fringe or CBD.

Along with the aforementioned Southbank area, in the last few years the city fringe suburb of Cremorne has transformed into a tech hot-spot.

These days referred to as Melbourne’s ‘Silicon Yarra’, big name tech brands such as Seek, MYOB and Carsales have all shifted or are in the midst of shifting to Cremorne, and as a result land values in the suburb have more than doubled in the past three to five years with A grade rents now pushing upwards of $500/sq m.

Cremorne’s amenities, public transport and ‘eclectic edge’ are seen as major drawcards for young workers, and employers are clearly taking note. The demand for inner city fringe office space is now seeing suburbs beyond Southbank and Cremorne becoming increasingly sought after.

With office vacancy hitting a record low in Melbourne’s CBD, and rents on the rise in Southbank and Cremorne, tenants are finding they cannot afford the asking rents in these areas, and as a result are being pushed to up-and-coming fringe areas such as Abbotsford (inner east) and West Melbourne (inner west).

With Melbourne’s population tipped to surpass Sydney’s in the not too distant future, it is likely we will see more and more inner fringe suburbs transformed into viable commercial precincts, as developers and planning authorities respond to the shifting pattern of demand.

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