HIGH demand and low interest rates have driven extraordinary growth in strata office values over the past two years.
The Australian Property Institute and Real Estate Institute of Victoria’s 2018 State of the Market was launched by newly appointed API CEO Amelia Hodge, who introduced the speakers.
Speaking at the event, Allard Shelton director Joseph Walton said particularly in the past 12 months, strata office values in Melbourne CBD have seen the rates per sqm rise from $4,000-$5,000 per sqm up to as high as $15,000 per sqm.
Walton cited the sale of Level 5, 271 William St which sold in 2014 for $1.3 million at $3,225 per sqm and it changed hands again last year for $2.5 million at $6,203 per sqm.
Level 2, 100 Collins St sold for $3.30 million at $14,163 per sqm.
Walton said the low interest rates environment is fuelling the market because buyers are weighing up the cost of owning a strata office versus renting.
Furthermore predictions of stronger rental growth over the next 12 months to two year period, due to a tightening in vacancy rates which has fallen to 5.6%, will only continue to spur demand for strata offices.
Australian Property Journal