Capital continues to seek exposure to Melbourne’s commercial markets

The Savills Blog

VIC Vals & PM: Capital continues to seek exposure to Melbourne’s commercial markets


Savills VIC Valuation & Advisory

Commentary from Ben Koops

Capital from a variety of sources continues to seek exposure to the Melbourne commercial markets. 

The recent solid face market rental growth and moderate decline in incentives has contributed to the attractiveness of the Melbourne market from a capital growth prospective. 

Expectations of ongoing demand matching the forecast supply have assisted in the justification for firming investment return metrics.

From an occupier perspective, the pendulum is firmly in the landlords’ favour for the time being, although incentive levels in some subsectors remain elevated. 

Future expectations around backfill supply offer tenants some hope but if the current rate of absorption continues, the window of opportunity is narrowing, and confined to specific precincts within the CBD.


Savills VIC Project Management

Commentary from Scott Mitchell & Metin Gutzel

There is currently a shift away from the traditional activity-based workspace environments, implemented in the past five years.

In terms of the workplace within financial institutions, workspace designs are now more suited towards supporting what is known as Agile Project Methodology.

Typically this methodology is being implemented in the financial services industry to respond quickly to technology and the rate of industry change in meeting customer needs.

This type of workspace was designed to incorporate more collaborative project space along with an increased range of individual work settings resulting in traditional meeting rooms in most instances becoming less and less a priority.  

The Savills VIC Project Management team has been working on several initiatives throughout 2018, including asbestos removal and solar panel/LED upgrades at Victorian schools.

The state government has allocated $155 million in funding to remove A3 asbestos from all schools in Victoria.

In 2017/2018, we delivered 100 asbestos-free schools, as part of the greater objective to eradicate asbestos from 1,200 schools throughout the next three to four years.

The state government has allocated funding to install solar panels and LED lighting at about 100 schools across Victoria as part of a pilot program, in order to reduce overall electricity usage.

The team has initiated a number of school visits, released tenders and recommendations for approximately 60 schools, and commenced delivery of solar panels.

The division is also engaged to deliver an incident response/make-safe program for the Victorian School Building Authority, as well as restore trams for 100 schools.

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