Melbourne’s central business district office market is seeing landlords adopt a more strategic approach, using targeted upgrades, stronger amenity and activation to boost leasing performance without large-scale rebuilds.
Landlords shift to targeted upgrades
James McMahon of Colliers said the trend is evident across leasing campaigns, with owners looking beyond traditional refurbishment programmes to pinpoint changes that raise an asset’s appeal.
He explained that the focus is on understanding what a building already offers, identifying areas to strengthen, and crafting a leasing strategy around those existing attributes.
“Landlords are increasingly recognising the opportunity to breathe new life into existing fit-outs, refurbishing quality spaces to present as fresh, modern offerings while avoiding the cost of a full rebuild,” McMahon said.
Examples of successful repositioning
At 525 Flinders Street, the new landlord added an on-site gym, revived the café and addressed prior security concerns, turning a previously vacant tower into a fully leased property.
The building’s fundamentals, excellent public-transport links, abundant natural light and nearby green space, helped achieve full occupancy after the upgrades.
At 360 Collins Street, a 7-year lease was secured with engineering consultancy ACOR, featuring a tenant-led refurbishment of the existing fit-out, providing a more cost-efficient approach while allowing the occupier to align the workplace with its sustainability objectives.
501 Swanston Street reached full occupancy after the landlord upgraded and modernised existing fit-outs across approximately 2,339 sqm. The approach created accommodation while avoiding the cost and disruption of a full refurbishment, with Peter MacCallum Cancer Centre and Peter MacCallum Foundation securing 942 sqm and 455 sqm respectively on five-year terms. New Era Caps also leased 898 sqm at 525 Flinders Street for three years, highlighting continued demand for well-presented office space.
Market outlook
Looking ahead, James expects demand to remain strongest for well-located CBD buildings that can offer quality amenity, wellness features and a compelling workplace experience. “The CBD continues to offer a level of amenity, connectivity and access to services that is difficult to replicate elsewhere. As occupiers continue to refine their workplace strategies, buildings that can offer a strong overall experience will remain well positioned.”
