McNee eyes post-pandemic bounce in city fringe offices
Developer Bill McNee is looking for a $70 million post-COVID windfall after identifying and meeting tenants’ demand for an amenity-soaked, boutique, city-fringe office.
Three years ago, the developer began a speculative office build in South Yarra in competition with multiple other city fringe projects that were either under way or being spruiked to prospective tenants.
Now Mr McNee’s company Vicland, after a quick build and leasing program, has put its newly complete and fully tenanted office at 11 Wilson Street on the market through Colliers’ International with a price tag around $70 million.
The agency says tenant enquiry is gathering pace as the pandemic is brought under control.
A spike in confidence in the first quarter of this year has prompted a 50 per cent rise in leasing deals, with 30 signed by Colliers across 22,500 square metres over three months to March.
Other agencies are predicting a K-shaped post-COVID recovery in the office sector as tenants target quality offerings, leaving less well appointed buildings with rising vacancy. Many pundits are predicting a 10 per cent contraction in tenant requirements across the board.
Daniel Wolman, who is managing the Wilson Street sale with Oliver Hay and Rachael Clohesy, said he was expecting initial interest from institutional investors and syndicates.
Tenants in the 9-level office include co-working firm The Commons, Revolution 360, Ipsos and Impressive Digital, giving it a weighted average lease expiry of seven years.
Multiple other city fringe offices are under construction in the area. Nearby Goldfields Group, is building a 24-level, A-grade office tower at 627 Chapel Street. In South Melbourne, both the Deague family and Hickory Group are completing speculative projects and Pallas Group has plans for a nine-level office at 67-69 Palmerston Crescent.
Across town another high-profile project, the Liberman family-backed Impact Investment Group’s $120 million Northumberland office in Collingwood, has become mired in the downfall of Grocon.
Mr McNee has since switched focus to a large-scale premium office and mixed-use project in the heart of Toorak Village.
