Dexus makeover of 360 Collins St pays off

THE refurbishment of 360 Collins St in Melbourne’s CBD has paid off for owner Dexus, which has secured a number of new tenants for the building.

More than 7,000sqm of space has been leased across 20 transactions over the past six months after Dexus split much of the building into smaller suites ranging from 190sqm to 900sqm.

The A-grade building also features a new lobby, casual meeting area, new restaurants and end-of-trip facilities.

Colliers International’s Adam Davy, Ben Christie and Stephanie Hawkins negotiated the leases.

Dexus was forced to reconsider the tower’s position in the marketplace following major tenant Westpac vacating 16,500sqm as a result of its move to 303 Collins Street.

Amongst the recent deals at 360 Collins Street include Eblueprine signing up for 321sqm on level 12; WBP Property Group securing 373sqm on level 15, and Hatch taking 288sqm on level 11.

Investor and media relations advisory firm Market Eye has signed a new lease for 240sqm on level eight, and will have a customised fit-out delivered by Dexus and builders Topic Interiors.

Davy said a flight to quality was behind Apt Wealth Partners’ relocation from 411 Collins Street to Dexus’ building, committing to 480sqm, also on level eight, on a five-year term.

He said the onsite amenity for the group’s clients drove the move, and the floor was subdivided to accommodate its specific leasing requirements.According to Knight Frank, tenants are continuing to upgrade their office accommodation. Premium and A-grade net absorption totalled 87,777sqm in the second half of 2016 throughout the Melbourne CBD, accounting for 75% of total net absorption.

Kimberley Paterson, associate director, research & consulting said much of this was in the A-grade market, which recorded its strongest net absorption level since July 2009.

The activity comes as limited supply pipeline looms over the next two years. Knight Frank expects the gross supply added to the market in 2017 and 2018 will average 1.3% of stock per annum, well below the average 3.6%.

Paterson said prime and secondary net face rents are forecast to grow by 5.0% and 4.5% per annum over the next two years respectively.

On level nine of 360 Collins Street, iBuildNew will move into 162sqm a with a high-spec fit-out, which was created in a subdivision of two larger leases to CH2M Hill and Intralink Wealth Management.

Davy negotiated the deal at a record rental rate for the building.

“The suite overlooking Collins Street had several interested parties and was hotly contested,” he concluded.

Australian Property Journal