Education sector driving Melbourne CBD office rentals
Education and training providers are snapping up office space in Melbourne with a 44% increase in education leasing deals for 2014 when compared to the previous year - a total of 36,000sqm.
According to research from CBRE in the last 18 months educator leasing deals in the Melbourne CBD has doubled from 5% (20,000sqm) to around 10% (45,000sqm).
CBRE research analyst Anne Flaherty said in contrast to many industries, tenants in the education sector are most likely to lease secondary grade space and are therefore, playing an important role in the absorption.
"In 2014, vacancy in the secondary market reached its highest level in a decade, forcing landlords to increase incentives in a bid to entice tenants. This is reflected in annual absorption figures, which totalled only 15,000sqm for secondary space, compared with 52,000sqm for prime," Ms Flaherty said.
“University enrolments are rising on average 4% per year, with domestic university enrolments exceeding one million for the first time in 2014 and the number of international students commencing study was up 10% over the previous year.
CBRE regional director of office services, Andrew Tracey, said in the first two months of the year alone, he has seen 4,146sqm in new enquiry, with a large portion of this interest in quality buildings that are willing and able to accommodate education providers.
Key Melbourne education lease deals
- CQU has signed a 12-year lease on 8,000sqm at 120 Spencer Street, a 22-level A-grade office building located opposite the Southern Cross Train Station.
- Monash College recently took up 6,570sqm at 271 Collins Street, committing to a 10 year term on the property.
- Red Hill Education has also secured space within the building, which is currently listed for sale with CBRE, signing a five-year lease on a 1,600sqm suite on the 8th level. CBRE Senior Negotiator, Office Services, Milly Stockdale negotiated the deal.
- Study Group committed to 6,700sqm in Church Lane earlier in the year, signing a 9.5 year lease on the Credit Suisse AG-owned property.
Several pockets across Sydney have also witnessed a surge in leasing activity, with Parramatta, Blacktown and Bankstown in the west emerging as some of the city’s largest education hubs, according to the report.