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[Melbourne] Facebook ‘Checks In’ To Docklands, Melbourne ‘Likes’ This

Facebook is the latest tech company to move into Melbourne after leasing almost 1,000 square metres at 720 Bourke Street, Docklands.

Facebook had issued a requirement to lease either A Grade or refurbished B Grade space that was located within Melbourne’s CBD or one of its fringe precincts late last year. The deal was brokered through Knight Frank director, James Pappas.

Mr Pappas said the Facebook lease is one of several tech deals negotiated in Melbourne in recent months with the trend also being witnessed in the Sydney CBD office market.

Led by demand from the technology sector, leasing activity gathered momentum in the Sydney CBD over the course of 2015 with net absorption levels reaching 10-year highs. Recent technology leasing deals transacted in the Sydney CBD office market include Amazon (10,000 sqm) at 2 Park St, Apple (5,600 sqm) at 20 Martin Pl, Expedia (4,500 sqm) at 1 Martin St and Dropbox (2,000sqm) at 5 Martin St.

The Facebook deal follows a spate of leasings in Melbourne which saw Electronic Arts commit to 4,205 square metres, also at 720 Bourke Street while LinkedIn (1,250 sqm) and Interactive Data (843 sqm) have moved to Southbank recently, joining tech heavyweights IBM. In addition, IT groups Zendesk (2,300 sqm), Shine Technologies (754 sqm) and Synchronoss (850 sqm) have all moved into Collins Street locations.

Further, the Domain Group recently expanded their operations, after leasing 2,880 square metres at 380 City Road, Southbank.

Mr Pappas said the tech companies have been increasing their share of floorspace in Melbourne over the past decade with the growth intensifying in the last five years.

“According to Knight Frank Research, in 2005, they occupy 120,000 square metres and now almost doubled this, occupying close to 200,000 square metres.

“The amount of space occupied by tech companies has grown by 27 per cent since 2011 with companies seeking quality space close to the city in order to attract the best employees,” he said.

Mr Pappas said the tech industry has been one of the fastest growing occupants and now accounts for about 4% of all the CBD and Southbank tenants, compared to 2% ten years ago.

According to Knight Frank Research, the CBD and inner city fringe office precincts continue to attract tenants with the next generation of employees preferring to live closer to places of work, as the war for talent means the balance of power in the modern workplace has shifted towards the employee.

Knight Frank Research analysis reveals that 79.4 per cent of the net absorption over 2015 recorded in the Melbourne CBD office market was attributed to migrating tenants. Interestingly, the vast majority of the relocations made by migrating tenants were into prime quality office space with Premium and A-grade accounting for 80.7 per cent of the total office space absorbed by migrating tenants in 2015.

With the unemployment rate appearing to have peaked for the short term, increasingly tenants are less focused on occupancy costs and more attentive to the attraction and retention of staff with the quality of workplaces a tenant driver.

Source: News Release, The Urban Developer, 6th July, 2016

https://www.theurbandeveloper.com/facebook-checks-docklands-melbourne-likes/

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