Refurbs put CBD buildings back in the game

As the crisis in available office space in the CBD continues, building owners are bringing refurbished space back into supply this year to take advantage of soaring rents.

Seeing an opportunity in the city’s east end, architect Jean-Mic Perrine is close to completing a $30 million redevelopment of a 1970s office building he bought last year at 10 Victoria Avenue.

Around 1,650 square metres of boutique office space is expected to be ready next month over three floors ranging in size from 520sqm to 550sq m. 

CB Richard Ellis senior director of office services Andrew Denny said the development would make a striking addition to Victoria Avenue.

“When it’s finished it will be quite unique with its full-height glazing and open plan floors,” he said.

Mr Denny said he had been fielding plenty of inquiry for the space, and hoped to secure a single mid-sized tenant.

Other refurbishment projects under way in the CBD include the Royal and Sun Alliance Building at 41-43 St Georges Terrace, with 2,800 sq m expected to come onto the market in the middle of the year, and the former RAC building at 228 Adelaide Terrace, which is fully pre-committed by Synergy.

Those soon to get started are the nine-storey Singapore Airlines House at 178 St Georges Terrace, and the three-storey former Home Building Society building at 184 Adelaide Terrace.

Both buildings comprise 3,000sq m net lettable area. 

Jones Lang LaSalle director of commercial leasing David Evans said there was significant demand for space suitable for mid-sized to small-sized tenants and all refurbished stock was keenly sought.

“All user sizes are finding it difficult to find space but the smaller to mid-sized users don’t have the outlook to commit to the larger projects so all they’ve really got is the refurbs when they come up,” he said.

“Many are not of a size to pre-commit and will act three to 12 months out of a lease expiry.”

Mr Evans said it would not be long before developers of major office towers began looking to backfill their projects with mid-sized tenants.