Melbourne’s ‘Silicon Valley’ attracts $2b in developments

Melbourne’s ‘Silicon Valley’ attracts $2b in developments

17 May 2019

Melbourne’s once-industrial suburb of Cremorne has continued to attract major technology firms and edgy start-ups, solidifying its unofficial title as Australia’s Silicon Valley, reports The Urban Developer.

Cremorne’s former warehouses have been transformed into commercial offices for the likes of Tesla, Uber, MYOB, the Walt Disney Company,, and REA Group.

The vacancy rate has plummeted below 1 per cent and office rents are now soaring to more than $500 per square metre.

Perched in the edge of Melbourne’s CBD, the tiny suburb—dubbed the “Silicon Yarra”—has become a sought-after hub for technology and creative companies, pushing up land values and rents and prompting a slew of new developments.

Currently, there is nearly $2 billion of development under way or approved in the area.

“Cremorne is in huge demand because it appeals to businesses who want to create a perfect work-life balance for their employees. Cremorne is a great first choice due to its pre-existing social infrastructure and popular streetscape,” Icon Developments senior development manager Brinn Tavener said.

Icon Development’s speculatively built diamond-like 5,799 square metre office at 600 Church Street—the former grounds of the old Nuttelex factory—is set to be completed by mid-late December this year, and has attracted online real estate business Domain as a potential tenant.

Meanwhile, job-search site Seek will move into a new office at 60-88 Cremorne Street, and accounting software firm MYOB is expected to move into the Caydon Group’s mixed-use Malt District on the Yarra River’s edge at the former Nylex silo site.

Other developments in the area include private developer Salta Properties and partners Abacus Property Group moving ahead with a speculative a $230 million office development in neighbouring suburb Richmond.

Boutique developer CostaFox is also doubling down on its investment in the area by swooping on a 5,000 square metre site opposite its planned new office development in Gordon Street. The deal values the land at a rate $11,800 per square metre.

A nearby two-level corner office at 5 Stewart Street recently set a benchmark for the suburb when it sold for $4.1 million on a land rate of $17,400 square metre, a result local agents describe as “staggering.”

“The land rate demonstrates the huge demand that exists for land-holdings within the Cremorne area,” Savills Australia’s Clinton Baxter said.

The growth in Cremorne is set to continue with expectations of 3,000 more jobs expected to be created in the hub every year for the next 15 years.