Pace Development Group to sell new Collingwood office

Pace Development Group is continuing to reweight its portfolio, this week listing for sale an office still under construction in Melbourne’s inner-north east Collingwood.

The 11-storey investment at 51 Langridge Street is expected to sell for about $30 million.

The offering comes two weeks after we reported that Pace acquired a Hawthorn East office development site for $4.1 million.

In July we reported, exclusively, that it spent about $20 million on a 2434 sqm building block in Fitzroy, the next suburb west of Collingwood.

The office at 51 Langridge Street is due for practical completion by the end of the year.

CBRE Middle Market’s Scott Orchard, Josh Rutman, Mark Wizel and Lewis Tong are marketing 51 Langridge Street for Pace.

The 3082 sqm office, due for practical completion by the end of this year, occupies a 510 sqm plot.

Eleven tenants have committed to a majority of the building, which has been actively marketed for lease this year.

Pace will offer any incoming owner a five-year rental guarantee for any portion of the building which isn’t filled.

As we reported in July, Pace Development Group paid c$20 million for this Fitzroy site (outlined).

“The design of the property has been shaped by strong occupier demand for smaller format, whole floor accommodation, which offer strong prospects for future rental growth given the strategic proximity to the Melbourne CBD,” Mr Orchard said.

Mr Rutman added “rarely does the market see an offering that embodies a combination of the hottest product, in the hottest location, in the most hotly contested and spoken about market sector, with office in vogue all around the country.”

“The full floor tenancies maximise the building’s net floor area and, in turn, income ability – offering a clever, diversified income strategy and ensuring the building does not need to rely on a big pre-commitment to underpin construction,” the agent said.

Developer has seen Collingwood evolve

Pace founding director Shane Wilkinson said his company “has been actively building and developing in the Collingwood and City of Yarra market for a number of years and has seen Collingwood continue to explode in popularity and strengthen as a diversified commercial, retail and domestic market, where people want to live, work and play.

The builder recently replaced the Smith Family headquarters at 79 Langridge Street, Collingwood, with a nine-storey residential complex containing 79 flats.

“Given the past take up of new residential product which has seen many developments be completed recently, comes a growing demand for modern office accommodation – Our team has recognised a sweet spot for smaller to medium sized tenancy offerings which has seen this development thrive,” Mr Wilkinson said.

Pace Development Group founder and managing director Shane Wilkinson.

“In addition to the quality, high specification and standard of finish, the building has many cutting-edge design features by SJB Architects and Interiors, which will differentiate it in the market – ensuring ongoing tenant appeal”.

Major occupiers Aesop, Swisse and T2 Tea have recently committed to new office headquarters in the suburb.

Co-working companies International Workplace Group, The Commons, WorkSmith, Hive Studio and Jam Jar Cowork also rent venues in the suburb, which CBRE said has an office vacancy rate of 2.8 per cent – “the tightest…amongst the Melbourne suburban precincts”.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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