Syndicators and high-net-worth private investors are driving a pick-up in investment activity in Melbourne's city fringe and suburban office markets, according to CBRE.
Sales volumes were considerably higher in the first quarter relative to 2012 as the cost of debt hit a new low and buyers chased prime commercial property investment yields of up to 8 per cent, CBRE's Justin Clarkson said.
Mr Clarkson said while established syndicators such as Australian Property Network, Cyre Trilogy, Vantage, Arena and Property Bank were all active in the market, a large number of new players were emerging.
They include Centennial Property Group, Heathley, Forza Capital, and Corval Partners.
The depth of interest and relative shortage of opportunities would place downward pressure on yields, he said. Significant transactions include the $7.7 million sale of 13 Compark Circuit, Mulgrave, and $16 million for the Vic Roads building at 12 Lakeside Drive, Burwood East.
Investors were continuing to favour fully leased stock given the continued caution in relation to risk, CBRE reports.
Rents within Melbourne's inner east A-grade office stock have risen 4 per cent this year to an indicative range of $300 to $340 per square metre net, with incentives having stabilised to approximately 10 per cent net, CBRE said.