Dexus leases 99% of Melbourne office

Lockdowns did not derail broader economic recovery
Demand for premium office space remains strong
Property Council of Australia Office Market report to be released soon

Dexus (ASX: DXS) has announced the Dexus Wholesale Property Fund owned property, 360 Collins Street, Melbourne has now been 99% leased.

The leasing activity comes despite the ongoing pandemic woes and Melbourne recently coming out of its fifth lockdown.

“The recent lockdown has interrupted but not derailed the broader economic recovery, and although momentum was impacted, we are already seeing confidence returning as these successful transactions demonstrate,” said Patrick Stronell, Victorian General Manager, Office Leasing at Dexus.

Dexus said American Express renewed its lease of 844 square metres of the property. In addition, space was leased to PAC Partners (473 sqm), ALIC (359 sqm) and CEVO (350 sqm).

A Heads of Agreement was also reached with an unnamed multi-national business for 894 square metres, expanding the tenancy by 605 square metres.

The weighted average lease term across the transactions was 4.2 years, with seven deals representing commitments from new customers.

The Property Council of Australia (PCA) said that in the six months to July 2021, the Australian office market vacancy has remained relatively steady recording only a slight increase in vacancy despite the continued Covid-19 uncertainty. [There will be more details to come in the PCA’s upcoming Office Market Report tomorrow.]

The data up to May showed leasing activity in Melbourne was at 45% of pre-Covid levels.

Office Occupancy, compared to pre-Covid levels

	January-21	February-21	March-21	April-21	May-21
Melbourne	34%	27%	39%	45%	45%
Sydney	50%	54%	56%	65%	68%
Brisbane	70%	72%	69%	70%	71%
Canberra	76%	72%	72%	70%	71%
Perth	74%	72%	79%	78%	77%
Adelaide	77%	77%	79%	78%	78%
Hobart	89%	84%	89%	91%	93%
Darwin	89%	89%	93%	93%	93%