Melbourne's second-largest metro office submarket, Melbourne's Outer East, attracts blue-chip tenants as the search for a flight to quality while maintaining a value  proposition adds value to the precinct.  

The Outer East region includes a collection of emerging and established employment and activity areas such as Mulgrave, Mount Waverley, Notting Hill, and Box Hill. Box Hill is increasingly  positioned as Melbourne's Eastern CBD, underpinned by strong transport infrastructure, retail  amenities, and multiple education and health-related employment anchors. 

This year, Colliers has secured over 40 office leasing deals in the outer eastern suburbs, 27 of which  have taken place in Mulgrave and surrounds. The Colliers team has achieved a new rent record for  the area of $385/sqm.  

Colliers Office Leasing Director Kevin Tutty said, "New A-Grade office space continues to attract  tenants as it offers an exceptional value proposition, without compromising on strong sustainability  features, secure car parking or premium end-of-trip facilities." 

The Outer East is attracting several blue-ship tenants as rents are still competitive, explained Mr  Tutty. "Brand new stock in the Outer East can be up to 50 per cent cheaper on a gross annual basis  compared to the Inner East, and up to 65 per cent less expensive than city fringe options." 

One of the year's most successful leasing campaigns has been 1 Peters Avenue, Mulgrave. Above the  building, which was purpose-built for Nissan in 2019, there is a speculative build of 6,000 sqm across  three levels, which Colliers and JLL, on behalf of Capitaland, have secured seven tenants to bring the  building to full occupancy. 

New tenants include Nab, ResourceCo, Safegroup Automation, Fairhaven Homes, Coloplast, Iveco  Trucks, and Drake International, which have all committed to leases ranging from five to seven years  and rates ranging from $340/sqm to the new record of $385/sqm. 

Colliers Office Leasing Director Damien Adkins said, "Our strategy revolved around meeting the  demands of the metropolitan occupier and providing new high-quality fit-outs state-of-the-art  building services, an abundance of car parking, topped with one of the best cafes in the area as you enter the property.""Having two fully fitted spec suites which doubled as display suites was  instrumental in completing these deals," added Mr Tutty.  

With its major employment agglomeration, underpinned by major health (Monash Medical Centre)  and education infrastructure (Monash University), Mulgrave and its surrounds an attractive area for several businesses.  

Recent data from Colliers also noted that The Outer East will further establish itself as the second largest metro precinct by area, approaching 1 million square metres of office space, with the  additional 12,000sqm of new supply that has come through with 5 Bond Street in Ringwood  reaching completion. 5 Bond Street is fully leased, with Colliers securing blue chip tenants, Eastern  Health, State Government Victoria and MEGT, with rents north of $450/sqm.  

Colliers Associate Director of Research Jonathan Mayes explained that new near-term supply is likely  to be limited, with the majority of supply mooted. "There is currently around 32,000sqm in projects  with development approval; however, these will not likely be delivered before 2027 and may be  deferred subject to market conditions."  

"Enquiry across the Outer East has remained firm during 2024, exceeding the past couple of years,  and we anticipate that more cost-conscious businesses will likely support occupancy across the  market with relatively robust enquiry being expressed across the medium and smaller occupiers.” 

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