Failed Melbourne Retail Project Revived As Office Space
AUSTRALIA – The Harbour Town complex in Melbourne’s Docklands that is best known for a failed shopping centre and the Melbourne Star observation wheel that is under liquidation is finding success as a primarily office development, reported the Australian Financial Review (AFR) on Tuesday afternoon (21 June, SGT).
So far, developer AsheMorgan has rented out 10,600 sq m (114,097 sq ft) of the overall 14,200 sq m (152,848 sq ft) of leasable office space in the two-storey building that was previously used as a shopping mall.
Aside from that, office rents in the development are rising. The first tenants committed to pay a gross rent of A$550 psm, but the rental rate has increased to around A$565 psm, with the average lease tenure ranging from three years to five years.
Current tenants include marketing company Digital Picnic, Burger chain Carl’s Jnr, and Racing Victoria. Beauty chain Endota has a training college there, in addition to three businesses that operate so-called dark kitchens within the premises, namely SPQR Pizza, caterer Peter Rowland, and a dumpling maker.
Moreover, small-scale tenancies that offer services and offer access to end-of-trip facilities and a communal “Club House” that come with boardroom, meeting rooms, a coffee bar, and break-out spaces need little extra fit-out and these suit the requirements of businesses that want to move in quickly.
The average time from committing to moving in at the repositioned project is merely two months, shared AsheMorgan’s Project Director Andrew Whiteside.
“That strategy of just in time has worked. They can plug in easily and start straight away. What it’s proving to us is the flexibility of the structure in changing uses.”
This represents a major repositioning of the 10ha project that AsheMorgan purchased from ING for A$150 million in 2014, after the latter failed to make Harbour Town into a hit retail destination.
However, repositioning a precinct is a sluggish process, and it could take time for would-be tenants to come around to the idea that the former retail precinct has been turned into an office development.
As for the Melbourne Star observation wheel, which was placed into liquidation in September 2021, Whiteside thinks it could work as an attraction on the site, but its future is still unclear.