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Melbourne Commercial Property News

Strong Returns for Office Suites

The strata office is not a new concept; it is however, taking a new direction. Office space from 60 sqm to 250sqm in particular has become extremely sought after, fuelled by thriving small business and strong tenant demand. Premium and "A" grade buildings are experiencing the best capital growth within the boutique strata market.

The recent trends show that successful smaller business's are escaping the maze of overly crowded older buildings and opting for a quality product which will enhance their corporate image. Style, practicality and the ability to provide up to date technological requirements are a must. Individual climate control, security, access to public transport and retail amenity are no longer on a wish list but rather prerequisites.

A primary consideration for potential owner occupiers is to weigh up the cost of leasing versus mortgage repayments. In most cases the result is it's far more advantageous to buy than rent. The ability to service a loan whilst building a successful business provides an element of financial security and a residual income stream upon retirement or sale of the business are contributing factors. Additionally, Tax allowances through depreciation, stamp duty savings in some cases and the occupier's full control over mortgage payments via rental contribution are also major attractions.

The availability of smaller office space has also given everyday investors the opportunity to purchase with minimal outlay and enjoy returns in some cases ranging from 7% to 8%.

Primary considerations for purchasers should include the quality of construction, availability of natural light, outlook, surrounding amenities and outgoing charges all of which will determine how well your property performs in the market place.

Alexander Robertson has a division solely dedicated to the marketing of office suites throughout Melbourne's CBD and fringe locations.