Office Deals Double in Melbourne CBD Market

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Melbourne’s office market is back in business, according to JLL’s preliminary results for this quarter showing almost $1 billion in sales, double the previous quarter’s transactions.

JLL recorded $985.9 million for the second quarter of 2021, almost double the previous quarter’s $412.5 million, in a sign the market had become buoyant.

The research shows this has been the strongest quarter for the Victorian commercial office sector transactions since 2019, before the Covid-19 pandemic sent the state into a series of lockdowns.

JLL senior director of capital markets Josh Rutman said they had appointed three new commercial sales agents to meet demand in the sector.

“The Victorian commercial property market has become increasingly buoyant as demonstrated by recent transaction volumes,” he said.

Despite strong investor sentiment in Victoria’s commercial sector, research from Cushman & Wakefield indicates CBD office rents are at their lowest ebb, but the decline has started to slow.

The Cushman & Wakefield’s Office MarketBeat for the second quarter shows that Melbourne’s CBD prime net effective rents had declined marginally to $382 per sq m, a year-on-year decrease of 11.6 per cent.

Average net incentives also continued to move upward, from 39 per cent to 41 per cent, the slowest growth rate since 2019, and placing downward pressure on net effective rents.

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