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Posted on 08 September 2018

The fortunes of Melbourne's city fringe office market look as bright as those of the founder of freshly-listed stock market darling Netwealth, who has quietly snapped up a South Yarra office building.

Rapid growth in land values, record-low vacancy rates, falling incentives and rising rents are underpinning an office revival that will see 11 new projects deliver 100,000 square metres of space in a sweeping arc from North Melbourne to Port Melbourne.

The well-documented boost to supply, driven by tenant demand and a shortage of existing office space, will propel office and land values further, agents say.

In an accelerating market, veteran landlord and investor Barry Janes has offloaded his four-level building at 141 Osborne Street in South Yarra- the basis of his serviced office Osborne Business Centre since the 1990's 0 for a speculated price around $13.5 Million. Title documents list Netwealth founder Leslie Heine as purchaser. Mr Heine, along with his brother Michael and Michael's son Matt, founded financial planning outfit Netwealth, which made a spectacular ASX debut late last year.

The building with a gross floor area of 1505 sqm and net lettable area of 1397 sqm is one of the few large floor plate offices in South Yarra close to the station. It is likely to be refurbished and re-let.

Mr Janes, while still on the look-out for opportunities will "take things quietly" after the sale. " In many ways if I was a younger person I would have looked to renovate and keep it", he said. 

Selling agent Vinci Carbone's Stephen Speck, who refused to discuss vendor or purchaser details, said the building was sold with vacant possession. "In South Yarra where rental rates are reaching excess of 600 sqm, people are seeing good value in contiguous office space," he said. "There's just nothing there. There are smaller 50 to 100 sqm spaces available but not larger 300 sqm plus spaces like this". Mr Speck said the vendor wanted to avoid a public campaign and instead targeted potential private buyers. "We approached a dozen known local developers, investors and property owners in the area."