The new project at 108 Power Street, between Burwood Road and Riversdale Road, is diagonally opposite the hugely successful Vantage office building, due for completion in May next year.
Spread over 4-levels, 108 Power Street will include about 4500 square metres of Premium-grade office space with outdoor balcony areas, ground floor retail and parking for about 130 cars. The office will be close to the Hawthorn train station and is serviced by trams that run along Bridge Road and Swan Street.
GormanKelly director Robert Kelly, who is marketing the property with Colliers International , said demand is “firm and measured” for high quality offices with floor areas of between 1000 and 5000 square metres.
Firming demand against limited supply is anticipated to cause rents to increase further as vacancy rates dip, with the Hawthorn market now considered one of the healthiest suburban office sectors in the country, Mr Kelly said.
“Premium rents in Hawthorn have increased from an average of $ 250-260 per square metre at the start of the year, to about $ 280-300 per square metre today,” Mr Kelly said. “This is giving developers the confidence to build offices without seeking a prior tenant pre-commitment”.
Mr Kelly said he expected construction of 108 Power Street to start in January 2008, and be complete by Jan 09.
“Tenants in the Hawthorn office market have been surprised to find, often for the first time, that “larger office space is scarce,” said Mr Kelly. “There are only 2-3 options currently available for tenants needing more than 1000 square metres of space available to occupy today. Most new projects under construction have been fully leased prior to completion.”
Mr Kelly said a lack of foresight by some companies has forced them to stay in existing premises, simply because they have not been able to find something else in the area, prior to their leases expiring.
The new office at 108 Power Street is diagonally opposite the Vantage office at 109 Burwood Road, being developed by Queensland-based investor Bruce Tilley’s construction company, First State Investments.
Mr Tilley announced in early 2007 he would start construction of the 13,400 square metre A-grade office, which at the time was the biggest speculatively developed office building under construction in Melbourne’s suburbs.
Engineering firm McConnell Dowell has since committed to two levels of the five-level building, equating to about 4460 square metres.
Recently, and as foreshadowed in BusinessDay last month, online car sales website carsales.com.au has also committed to the Vantage, leasing one level, or about 3000 square metres of the A-grade building.