Developers Gus Cooper and Michael Gannon have applied to replace one of Cremorne’s largest industrial properties with two office buildings and a public plaza.
The landmark proposal, for 68-88 Green Street, 2.5 kilometres east of the Melbourne CBD, will contain a total of 11,513 square metres of lettable area of which 1004 sqm will be retail.
It will also include 105 car parks and 160 bicycle spaces.
The Bates Smart designed offices – one of 10 levels and the other rising four storeys – will include a rooftop garden space for occupants, one which will be laid out by South Yarra-based landscape gardener Jack Merlo.
These commercial buildings will wrap around a 202 square metre open space at the termination of Adelaide Street.
The 2868 sqm rectangular site has an enormous 128 metres of frontage to both Green Street, and the train line connecting the South Yarra and Richmond stations.
Instead of retaining the existing warehouses, Mr Cooper and Mr Gannon’s Cremorne Properties, via a registered company, 88 Green Pty Ltd, intend to create an industrial look by using red-bricks, masonry screens and off-form concrete, on the lower levels of a contemporary structure.
The application, being reviewed by the council, comes almost two years since Cremorne Properties pre-committed employment website Seek to a prominent and distinctive seven-level, 19,300 sqm office, which is under construction at nearby 60-88 Cremorne Street, Cremorne.
Described by sales and leasing agents as “the country’s hottest office market”, Cremorne A-grade commercial space regularly rents for more than $500 per square metre, per annum, putting the precinct in the mix with South Melbourne and South Yarra, as the most expensive outside of the CBD and Southbank.
Last September, we reported the sale of a Stephenson Street, Cremorne, site which valued land at about $13,000 per sqm.
Elsewhere in the precinct, software giant MYOB pre-committed to an office, now under construction at 17-21 Harcourt Parade, a site which abuts the Monash Freeway. This building’s developer, Caydon, sold this yet-to-be-completed office investment to AXA Investment Managers, last September, for about $100 million.
Zig Inge Group is another builder in Cremorne – it is constructing a seven-storey office on the airspace of a former Rosella factory at 57-61 Balmain Street. Plumber Reece signed on as a tenant for part of the Zig Inge complex last year.
CostaFox is also proposing an eight-level, 5465 sqm strata office at 1-11 Gordon Street and another c5000 sqm commercial building at 22-26 Gordon Street, a site it acquired for $11.5 million in April.
Other developers pitching to build offices in the area include:
- Alfasi Property, with an 11-level, 18,000 sqm building at 506-508 Church Street, Cremorne;
- Peregrine Projects, with a 10,500 sqm office at 175 Burnley Street, Richmond, currently for lease via Colliers International and CBRE;
- Salta Properties, with a 25,000 sqm proposal at 459-471 Church Street, Richmond, a site it bought last year for $51 million;
- Bayley Stuart, with a 5793 sqm complex at 600 Church Street, Cremorne (reportedly set to be the next home of Domain Group, which is currently at 380 City Road, South Melbourne, walking distance to the CBD); and
- Riverlee and Bamfa, with a 13-storey office, containing 17,000 sqm of area, at 484 Swan Street, Richmond.
Mr Cooper and Mr Gannon are amongst Cremorne and Richmond’s most prolific land owners.
In 2014, Cremorne Properties completed construction of a five-level office at 511 Church Street, Richmond, home to the industry-dominating property listing portals, realestate.com.au and realcommercial.com.au.
In 2010, the pair paid $20 million for Cremorne’s Maple Close business park, part of which has been subsequently tenanted to Tesla.
Matthew Feld, director of agency Teska Carson, which is headquartered in Richmond, said Cremorne is becoming known as Melbourne’s technological, creative and fashion industry hub.
“The amenity that the area provides for staff is second to none,” Mr Feld said, adding the precinct has “outstanding public transport and numerous hospitality options, with more coming”.
The broker said large companies including Seek, which will move from St Kilda Road, and MYOB, which will relocate from Glen Waverley, choose the area to attract and retain staff.
“The large companies are all about staff retention, they feel that if they can offer staff a brilliant location it will ensure they stay on board for longer periods of time”.
Developers are following suit.
“With increased tenant demand and limited stock options, savvy investors are looking to take advantage of these conditions by buying up buildings that will not only see outstanding rental growth, but also a strong increase to their capital value year on year”.