Investors and developers are heading to Melbourne’s suburban office markets, displaying confidence in non-CBD commercial real estate, the Australian Financial Review (AFR) reported.

Low vacancy rates, rising rent and land values have encouraged the spike in interest, AFR said.

South Melbourne’s office market has proved a dream for investment, with two small offices selling for $18m in July and August.

At 34 Eastern Road, Valeo Construction’s Dimitrios Tzouvelis sold a two-level vacant building for around $10m to developer H.CO Property, at a land rate of almost $12,000 per square metre. It last sold for just over $6m in 2015.

At 100 Park Street in South Melbourne, a three-level office building owned by Rescom Mortgages sold with vacant possession to a local buyer for $8.088m at an auction handled by CBRE’s Julian White, Dylan Kilner, and Chao Zhang.

“South Melbourne is now the most in-demand city fringe market. Access to beachside suburbs, St Kilda Road and the Melbourne CBD along with its famous cafes are what makes it so appealing to all buyer types,” said Kilner.

Leo and Rose Blake also sold a multi-storey office building at 3-7 Hamilton Street in Mont Albert for about $18m, having paid $13.4m in 2007, AFR reported.

In Malvern East, Momentum Wealth Management Group director Paul Huggins sold a two-level corner office for about $13m.

The sales came in after CBRE reported a 46% fall in the value of metropolitan buildings sold in the first half of the year. However, there had been a flurry of deals in the $10m and higher range after the federal elections, CBRE agents said.