Life insurance group AIA Australia will lease three refurbished floors at 509 St Kilda Road but the deal is unlikely to dent the area’s 11.4 per cent vacancy rate.
AIA will take about 7000 square metres on levels 5, 6 and 7 and claim exclusive naming rights, main signage rights and 85 car bays in the building owned by a Calibre Capital fund, Colliers International’s Ben Christie said.
”The lease was executed just prior to Christmas, making this the largest transaction completed on St Kilda Road in 2013,” Mr Christie said.
On the sales side, the Julliard Group is believed to be close to finalising the transaction of 424 St Kilda Road to a Chinese group, with expectations around $45 million.
A three-level office building with 4008 square metres of net lettable area and 156 car spaces at 20 Queens Road is also on the market, expected to lure residential developers.
AIA will relocate from 553 St Kilda Road to space formerly occupied by MLC (NAB’s wealth management division) which left 11,500 square metres vacant when it moved to 700 Bourke Street in Docklands late last year.
Mr Christie would not disclose leasing terms but rents for similar assets are believed to be around $300 per square metre per annum. The hole left by MLC had the potential to create a ”significant spike” in the area’s vacancy but the AIA deal and Webjet (1670 square metres) and Transfield Services (3378 square metres) partly neutralised the impact, Mr Christie said.
”We’re forecasting vacancy on St Kilda Road to peak at 11.43 per cent in July 2014, then gradually trend down,” he said.
Colliers’ forecast is slightly higher than the latest Property Council estimate of 11.4 per cent total vacancy, with only D grade recording no vacancy. Melbourne’s overall office market vacancy rate fell from 9.8 per cent to 8.7 per cent.
This story Administrator ready to work first appeared on Nanjing Night Net.