Still plenty of space at 357 Collins Street as Australand office vacancy rate rises to 8.4%

More than a quarter of space (26%)  in Australand’s flagship Melbourne CBD office development, 357 Collins Street, remains vacant with the property group reporting an overall rise in its $1.1 billion office portfolio vacancy rate from 5.1% in December to 8.4% as of July.

The rise in the office vacancy rate was revealed as part of half-year results to June 30 with Australand after tax profits down 1%.

It is in line with CBD  office vacancy rates rising across Melbourne and othe capital cities with Jones Lang LaSalle recorded negative net absorption of -191,900 square metres in the June quarter and a rise in the national CBD office market vacancy rate to 10.9%.

JLL recorded a 10% vacancy rate for Melbourne over the June quarter, the first time the city's CBD office market has moved above 10%  in the current cycle.

357 Collins Street, the redeveloped former stock exchange building, which stood empty for nearly two decades as the tallest vacant building in the city, was completed late last year.

It offers 30,000 square metres of office space plus a retail arcade and makes up 8.4% of Australand total investment assets, and around 17% of the total $1.1 Australand office portfolio.

Its major tenants are the Commonwealth Bank and specialist telecoms construction firm Service Stream, involved in a National Broadband Network joint venture project.

The office tower has a book value of $195 million and is 100% owned by Australand.

Other office building within the  Australand portfolio that have vacant space include the 17,000 square metre A grade building ‘F’ on Homebush Bay Drive in Rhodes, which has more than a third of its office space (37%) available for lease. It was completed earlier this year.