UEM Sunrise says strong strata office sales at its Melbourne CBD development

Malaysian developer UEM Sunrise says it is seeing strong demand for strata offices at its Aurora Melbourne Central development, which it attributes to a combination of low supply in the CBD and record low rates.

At Aurora Melbourne Central, the total sales are now more than 75 percent, reaching record rates of $10,350/sqm, the company said.

Citing Colliers International data, it said prior to Aurora, the latest strata office projects have sold for roughly $8,000/sqm at 580 Collins Street and $7,500/sqm at 838 Collins Street.

Aurora Melbourne Central is a 92-storey skyscraper comprising residential, serviced apartments, retail and offices. 

Colliers’ head of Office Sales, Chris Ling, said the location, quality of the project and its direct connection to Melbourne Central station and shops is driving a premium.

“Additionally, the extremely low supply of strata office in the CBD and fringe area is driving demand from both local investors and offshore investors – many of whom have typically been focused on retail, but have been priced out with yield compression and are looking to office spaces instead,” said Ling.

Investors make up about 50% of sales with overseas buyers mostly from Hong Kong, Malaysia and Singapore.

“Adding to that, many owner occupiers are relocating to the CBD as the amenities and access for clients and staff is far more superior, and it’s this group where we’ve seen substantial demand from,” he said.

Also, existing tenants are capitalising on the record low interest environment and looking to purchase their own office as a more viable option, taking advantage of lease expiries to enter the property market.

The owner-occupier buyers so far include a cosmetics group, an education provider, and a property developer for their office space.

The company said it has sold 100% of the residential units and more than 75% of the strata offices to date.

CEO of UEM Sunrise Anwar Syahrin Abdul Ajib said Aurora was popular with owner occupiers it was the “perfect location for commercial office spaces,” because of the direct connectivity to the train station. 

“Having sold 100% of the residential units with record momentum, we are very pleased with the successful sale of over 75% of the strata offices to date.”