The Sturt Street Bet: How One Ballarat Developer Is Rewriting the Rules on Office Space

Colliers Ballarat recorded a vacancy rate of just 6.2 per cent for prime office space along Sturt Street in the June quarter — the tightest reading in four years — and one local operator is responsible for a significant chunk of what's actually being leased. Nexus Property Group, headquartered in the former ANZ building at 27 Sturt Street, has converted or refitted five commercial tenancies in central Ballarat since January, betting that mid-sized businesses want quality space rather than a desk in a shared co-working shed.

The timing matters. Nationally, the property market is softening, first-home buyers are backing away from purchases, and competition for industrial land is intensifying as data centre developers circle outer suburbs of major capitals. Ballarat sits at an unusual inflection point: its commercial rents haven't spiked the way Melbourne's fringe markets have, yet demand from businesses relocating from Geelong and the outer western suburbs is quietly ticking up. That gap — between affordable rents and rising tenant quality — is precisely where Nexus has planted its flag.

From Bridge Mall to Dana Street: What the Conversions Look Like

The firm's most recent project, a 480-square-metre full-floor fit-out on Lydiard Street North, completed in May 2026, drew three competing offers within nine days of listing at $285 per square metre annually. The winning tenant — a civil engineering consultancy expanding its regional Victorian footprint — signed a five-year lease, the kind of long-term commitment that until recently was rare in a city where businesses preferred flexibility over commitment.

Nexus has also been active further south, converting a tired retail tenancy near Dana Street into a split-level office suite designed around acoustic privacy and natural light. The brief came directly from the tenant, a Ballarat-based accounting firm that outgrew its Bridge Mall location after taking on 12 new staff over 18 months. The fit-out cost roughly $320,000 and was completed in 11 weeks — fast by any standard, and a deliberate selling point for businesses that can't afford six months of disruption.

The City of Ballarat's own 2025 Commercial Land and Activity Centres Strategy flagged that the CBD core needed to absorb an additional 8,000 square metres of office floor space by 2031 to meet projected employment growth. Nexus's conversions account for about 2,100 square metres of that pipeline already.

Hybrid Work Changed the Brief — Ballarat Took Note

What's driving the demand isn't complicated. Hybrid working didn't kill the office; it killed the bad office. Businesses moving to Ballarat from Melbourne's west are not hunting for open-plan warehouses. They want meeting rooms with proper soundproofing, end-of-trip facilities, and proximity to the Ballarat Train Station on Lydiard Street — a commute anchor for staff who split their week between home and the office.

The broader national picture adds context. With AI datacentre developers competing aggressively for industrial land in Sydney and Melbourne, freight and logistics operators are being pushed toward regional centres. Several logistics and tech-adjacent businesses have quietly approached Ballarat's Economic Development Office in the past six months about establishing back-office operations in the city, according to publicly available council meeting minutes from May 2026.

Nexus appears to have read that pipeline early. Its development pipeline for the second half of 2026 includes a 700-square-metre refurbishment on Armstrong Street South, targeting professional services tenants, and preliminary planning work on a mixed-use building near the Ballarat Base Hospital precinct on Drummond Street North — an area seeing increasing foot traffic as the hospital's expanded oncology wing opens.

For businesses considering a move, the arithmetic currently favours acting before that vacancy rate tightens further. Mid-grade Sturt Street office space is still leasing at between $220 and $260 per square metre annually — well below comparable Geelong CBD rents, which averaged $310 in the March quarter. That differential won't last indefinitely. The firms that have already signed are banking on Ballarat's commercial core having more room to run than the market is currently pricing in.