Pacific Brands takes lease on fringe
Pacific Brands is headed to Port Melbourne in what is reportedly the largest office leasing deal seen in the city fringe market this year.
The clothing retailer, whose marquee brands include Bonds, Hard Yakka, Holeproof and Mossimo, is consolidating some of its smaller suburban operations but will continue to keep its head office in Hawthorn.
The deal for 4998 square metres will see Pacific Brands occupy the bulk of the 7322 sq m Challenger building at 187 Todd Road. The other major tenant is George Weston Foods.
The nine-year lease on its new operations facility also suggests the once-troubled group is optimistic about its future.
Pacific Brands posted a profit of $38.9 million for the first half of 2012, after steep losses on the back of falling sales, write-downs and restructuring costs. They also announced plans early this year to expand into the US, Britain and Asia.
"The building at Todd Road appealed to the company's size and location requirements and the added enticement of competitive lease terms," said Colliers International's Ben McKendry, who negotiated the deal along with Rob Joyes.
"The lease to Pacific Brands represents the biggest deal in the city fringe office market to date in 2013."
Colliers says the deal is a positive sign for the city fringe office market, which is the only segment, apart from the inner-east precinct, where the vacancy rate has fallen in the first quarter of 2013. The vacancy rate on the city fringe is now 7.19 per cent, which is above historical trends.