The suburb of Sunshine in Melbourne’s west, the long-suffering butt of bogan jokes in The Castle and Kath & Kim, is having the last laugh as it braces for a new period of prosperity from a raft of new commercial investments.
With plans for a six-level, A-grade office tower to be built above the existing Sunshine Plaza, and every development site on offer being fought over by a number of buyers and cashed-up investors, it’s all set to achieve its ambition of becoming the CBD of the west.
“It’s got a low socio-economic background and it’s pretty ordinary when you go through it at the moment, but we believe there’ll be a lot of re-gentrification going on,” said Andrew Dawkins, from commercial property specialist Dawkins Occhiuto.
“There’s a lot of government support for that, too, with a number of grants on offer with the Sunshine Activity Centre they’re proposing. And the biggest thing that can’t be under-estimated for that area is the fact that it’s the junction box for so many train lines.”
Sunshine, 11 kilometres west of Melbourne’s CBD, has a great number of industrial estates, warehouses, retail clusters and a growing residential population and is attracting enormous attention from commercial property purchasers and investors.
Much of that is to do with the massive infrastructure spend for the area, with its regional rail link, the widening of the M80 Western Ring Road currently underway and the future Metro tunnel, which will provide a 15- to 20-minute train ride to the CBD and link Sunshine to the south-eastern suburbs on its completion in 2026. Later, there’ll also be the Melbourne Airport Rail Link, due to start construction in 2022, and the recently announced Suburban Rail Loop to be completed in 2050.
“Sunshine has been identified as one of the six National Employment and Innovation Clusters (NECs) and is proposed to become a major jobs centre in the west’s burgeoning economy,” said Mathew Kent, director of office leasing at Savills Australia.
“With an expected 79 per cent of Victoria’s population set to reside in Melbourne by 2027, the swell in numbers means we can expect to see more people living and working away from the city – even more so in a post-COVID era as people adopt a more flexible lifestyle. It’s an exciting time for the west.”
Brimbank Mayor Ranka Rasic agreed, and said the Sunshine Priority Precinct was set to become the “powerhouse of the west”.
“The precinct’s jobs and resident population is expected to double by 2050,” she said. “It has the land, linkages and location required to service the western region as a major employment and skills centre.”
Sunshine’s CBD has about 70 hectares of key development land to build a 21st-century central hub, and 121,000 square metres of commercial space has received planning approval there over 13 different sites. A further 21,000 square metres of commercial space is either under, or has finished, construction over five CBD sites.
Major projects in the area include: seven levels of fully let offices on Clarke Street – now with another two storeys being built on top – making 11,000 square metres of space in total; proposals for four new hotels with 500 rooms; an upgrade to the law courts; and the Sunshine Plaza redevelopment.
Savills is working with JLL on the new 15,300-square-metre office building above the shopping centre. Sunshine Plaza Corporate will include a 120-child early learning centre and a 667-car parking basement. All floors are currently for lease.
Joshua Tebb from JLL said it was expected the office building would become a major beneficiary from the trends arising from, and accelerated by, COVID-19.
“There’s a real decentralisation away from the CBD into the outlying areas to create work hubs closer to existing employment bases,” he said.
“In addition, the announcement of the airport rail link and suburban rail loop have been game-changers for Sunshine as they’re links from the CBD into the western suburbs all the way to Geelong. So having quality office space closer to where the workforce lives will prove a valuable asset, as the housing affordability and availability there will continue to see the population grow.”
The infrastructure, the proximity of Sunshine Hospital and Victoria University and the predicted local population growth are all great lures.
“There are a lot of developers and speculators wanting to buy and work out development plans in view of the population growth,” said Mr Dawkins, who sold a 2.2-hectare Sunshine gateway site on Ballarat Road in December 2020 for more than $20 million, despite the COVID-19 lockdowns. “It’s an area that’s accessible and affordable.”
Low interest rates and COVID-19 savings are also spurring many investors to seek tenanted commercial property, said Michael Satterley of Knight Frank Melbourne, who sold a 1450-square-metre block of development land on First Avenue, a kilometre from Sunshine station, for $715,000 with four to five bidders late last year.
He said he was being approached by many Melbourne investors, and also those from Sydney and Queensland who’ve pinpointed Melbourne’s west as a potential growth area.
“The infrastructure is proving very attractive and, while I’m biased as I work in the west, I’d say it is our biggest commercial hotspot at the moment,” Mr Satterley said.
“There’s a lot of residential development happening further out towards Cairnlea and I’d say commercial prices have gone up at least five per cent in the last 12 to 15 months.”
There has also been a huge amount of interest in a 9200-square-metre, mixed-use development site within the Sunshine Activity Centre on Foundry Road with a permit approved for commercial, retail and residential. So far, offers have topped $20 million from several potential buyers.
“The growth story of Sunshine is about the infrastructure spend and affordable land and we’re seeing a lot of development activity,” said agent Danny Clark of Gross Wardell ICR. “There’s always been a lot of speculation, but now it’s actually happening.”
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