Raise the Bar! Melbourne’s Legal Precinct Faced Limited Supply

The legal precinct of Melbourne is experiencing a significant demand for strata office space, with research showing that the strata office buyer demographic is 80% driven by local owner occupiers and small to medium SMEโ€™s with 3- 70 staff members.

These business owners have often leased for multiple terms and are now seeking to stop paying rent by acquiring office space in a SMSF or family trust structure and paying themselves rent, a highly effective retirement and tax strategy.

In addition to the local owner-occupiers, the legal fraternity has also returned to work in the CBD and is flourishing. Many lawyers are looking to set up their own chambers and establish a stable commercial asset for their future.

However, according toย Anthony Kirwan, Cushman & Wakefieldโ€™s Associate Director Investment Sales, Victoria, the limited supply of strata titled commercial office buildings in the Legal Precinct is of significant concern.

โ€œThe precinct only boasts seven strata titled commercial office buildings, with most whole floors owned within SMSF and family trust structures by long-term owner-occupiers.

โ€œThe Legal Precinct is one of the most tightly held pockets in the Melbourne CBD, and there have only been four strata office transactions in the past 18 months since Covid, with an average pricing of around $10,000 per sqmโ€ he said.

Recent sales in the precinct include Level 5, 414 Lonsdale Street, Melbourne, which sold for $1,500,000 for 154 sqm of office space, and Level 12, 256 Queen Street, Melbourne, which sold for $3,500,000 for 312 sqm of office space. Both sales were vacant possession and achieved an average of $9,740/sqm and $11,218 per sqm, respectively.

George Davies, Cushman & Wakefieldโ€™s Associate Director Investment Sales, Victoria, said the demand for strata offices in the Legal Precinct is not likely to diminish any time soon, with a thriving legal fraternity and local owner-occupiers seeking to structure their acquisitions in a tax-effective manner.

โ€œThe limited supply of strata titled commercial office buildings in the Legal Precinct is likely to drive prices up in the foreseeable futureโ€ he believes.

In light of this, a local, private investor is bringing to market a whole floor Strata office of 375sqm* which is suited to Legal Chambers or Businesses with 10-35 people, as well as strategic investors.

For sale throughย Anthony Kirwan,ย George Daviesย &ย Jeff Haย of Cushman & Wakefield, the strata office on Level 3, 271 William Street offers an irreplaceable corner aspect overlooking the Royal Mint with excellent natural light and just moments from Flagstaff Train Station, Trams & All Major Law Courts.

Mr Kirwan said โ€œBeing situated on the corner of William Street and Little Lonsdale Street within immediate proximity to all major courts, this asset is ideally suited to legal professionals.

โ€œBarristers are some of the highest paid professionals in the country and weโ€™re experiencing an emerging trend of groups of colleagues seeking to form their own chambers. The location is also highly desirable for financial services professionals and education usesโ€.

Mr Davies went on to say โ€œWe are working with several groups of barristers seeking to set up their own chambers and secure a rock-solid commercial asset for their future. 271 William Street is a perfect example of an ideally suited asset for education and financial services, such as these, and as the asset is offered with vacant possession, it will not last long on the marketโ€.

Level 3, 271 William Street Melbourne is for sale via an International Expressions of Interest campaign closing Wednesday 31st May 2023 with a price guide of $3-3.3 million through Cushman & Wakefield.

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