Start-ups Snapping Up Office Premises in the ‘Burbs
Click here to read the original article by Larry Schlesinger for commercialrealestate.com.au, 23 May 2016.
New strata office developments in Melbourne’s middle and outer suburbs are selling out as small business owners choose to buy rather than rent their own office premises – mirroring a growing trend in the city centre.
In Bundoora, about 16 kilometres north of the city, developer MAB Corp, run by BRW richlisters Andrew and Michael Buxton, has sold more than half of the 41 office suites in its $18 million Ormond Square tower to owner-occupiers. The tower is the fifth in MAB Corp’s 104-hectare mixed-use University Hill estate.
Small businesses including accountants, doctors and designers have acquired 22 office suites in Ormond Square, paying around $4350 per square metre, helping to take local employment in the development beyond 3000 jobs.
Small accounting firm Inspire Business Solutions, run by Sam Capuana and Vicki Ellery, acquired a 59 square metre office in Ormond Square after setting up a self-managed super fund and leasing the premises back to the business.
Mr Capuana said low interest rates, the tax perks of owning property in an SMSF, the ability to acquire a brand new office with the latest sustainability and security innovations and expectations of capital growth over time encouraged them to buy their own premises.
“We’ve bought in a growth corridor, where families and businesses are moving and we believe the office will become more valuable over time,” he said.
The new office will provide accommodation for four staff, plus a kitchenette and small reception area.
MAB Corporation’s director of commercial projects Andrew White said the vision behind projects like University Hill, which started in 2005, was to create jobs close to where people lived and increase the level of white collar employment outside of the CBD.
“Many thought it would be impossible to bring white collar jobs to the northern suburbs – an area that was traditionally home to blue collar industries like manufacturing, transport and logistics.
“Yet 10 years on, we’ve completed our fifth office building and established a high quality office park environment similar to Melbourne’s eastern suburbs,” he said.
In Box Hill, a suburb 15 kilometres east of the city that has attracted a number of big commercial and residential projects because of a more liberal planning regime, the Ouson Group has sold 15 of 16 strata offices off-the-plan in a new $10 million development, mostly to local business owners, doctors and lawyers.
The offices, which range in size from 63 sq m to 82 sq m, and start from just under $500,000 with on-site parking included, have been marketed by CBRE’s Tom Tuxworth, Nick Lower and Tim Last.
Mr Lower said a 77 sq m strata office in the development sold to an international owner-occupier at a rate of $8324 per sq m, which he said was a record for Box Hill.
“There’s been a significant shift from local to offshore buyers purchasing space to potentially run their business out of in the future,” he said.