Owner-occupiers are leading a surge in demand for Melbourne city fringe property, according to Gray Johnson.

The commercial real estate agency has recently overseen a series of strong results around Wellington, Smith and Gertrude Streets in the suburbs of Collingwood and Fitzroy. 

Director Matt Hoath said the properties involved in the sales were older style buildings with good site coverage.

"We're finding more of those heritage warehouses are being converted to offices," he said.

"The Labor government wants buildings to be recycled and put out to market at a time when owner-occupiers are buying."

8-10 Peel Street, Collingwood was recently sold by Gray Johnson. Source: Gray Johnson

In July last year, Mr Hoath told WILLIAMS MEDIA Cremorne was "the hottest suburb to get an office", with results around $14,000-$15,000 per square metre. 

He said buyers had since turned their attention to other fringe suburbs such as Abbotsford following increased market activity in Cremorne.

"Abbotsford is now becoming the 'new Richmond' in the city fringe," he said.

"You can buy a refurbished building there for $6000 per square metre, as opposed to Cremorne, where a lot of buyers have been priced out of the market."

Gray Johnson is currently marketing a stand alone office/showroom at 47 Russell Street, Abbotsford for sale, which Mr Hoath described as an example of "extraordinary value under $4 million in Abbotsford".

"Abbotsford is exceptional value and there are genuine opportunities in this sub-market," he said.

"This window will probably only last for 6 – 8 months."

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