Melbourne's rental rates a drawcard

Business Asia, August 30, 1999

Melbourne offers some of the most competitive office accommodation rates in the Asia-Pacific region, with prime rental rates around four times cheaper than Hong Kong.

An annual benchmark report, called "Melbourne, Australia -- Making Business Happen", indicates that Melbourne compares favourably with North American, European and Asian capital cities.

For prime CBD rentals, Kuala Lumpur comes in cheapest of the benchmarked cities at US$144.80 per square metre. Melbourne is second at US$165 per square metre, substantially cheaper than cities such as Singapore (US$496.60) and Hong Kong (US$815.50).

The report's data is gathered by an independent researcher.

Industry Minister Mark Birrell said Victoria made a concerted effort to attract foreign investment.

"In simple terms, we try to work in partnership with Asian investors who need to have some hurdles removed and we hopefully can remove some of the hurdles before they arrive," he said.

In the aftermath of Asia's economic crisis, Birrell said legal and political certainty was now a more significant factor in site selection for businesses.

Australia fared well in this regard, while low inflation, improved productivity and a large skills base were also attractions.

Birrell said changes to Australia's economy in the '80s and '90s had helped it survive Asia's crisis.

Melbourne prides itself on having a high skills-base population, particularly in emerging technologies and industries such as information technology.

The benchmark report shows that more than 18 per cent of Victoria's workforce is counted as professionals, with 10.7 per cent associate professionals, and 7.3 per cent managers and administrators.

Call-centre costs are also highly competitive in Melbourne thanks to a high availability of multilingual workers and a good telecommunications infrastructure.

Melbourne's call-centre costs per seat are US$36,000 compared to Singapore at US$56,200 and Hong Kong at US$63,100.

The report found that multilingual citizens make up 20 per cent of Victoria's and 30 per cent of Melbourne's population.

A total of 150 languages are spoken in the State, with the top five languages other than English being Italian, Greek, Vietnamese, Cantonese and Arabic. In addition to cost-effective office space, manufacturing and factory rentals in Melbourne also compare favourably with other major cities.

CBD PRIME RENTAL
(US$ PER SQM)

Kuala Lumpur         144.80
Melbourne            165.00
Manila               317.30
Dublin               418.70
San Francisco        467.00
Singapore            496.60
Osaka                593.20
Hong Kong            815.50
London              1267.50