The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
UPCOMING EVENT - INDUSTRIAL AND LOGISTICS SUMMIT 16 OCTOBER, SYDNEY
INDUSTRIAL AND LOGISTICS SUMMIT - TICKETS NOW ON SALE
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OtherEditorial DeskTue 12 Dec 17

Sydney North Shore Office Market Continues to Climb

13ea5690-48f8-4a62-8812-a5778fce31b6

After five years of decline, North Shore office stock is again on the rise with Sydney CBD's strong leasing market spilling over to buoy the area.

Office markets in Sydney’s North Shore comprise the out-performing suburbs of North Sydney and Macquarie Park, in addition to the smaller hybrid markets of Chatswood, and Crows Nest-St Leonards.

Collectively they amount to roughly 45 per cent the size of the Sydney CBD.

Global real estate group Cushman & Wakefield's latest report on Sydney's North Shore Office Markets identifies a precinct "rejuvenation" is under way in North Sydney, led by the development of new office towers at 1 Denison Street and 100 Mount Street – both of which are well-positioned to benefit from the addition of Victoria Cross Station and the Sydney Metro in 2024.

[Related reading: North Shore Offices in High Demand]

Over the long term this transport infrastructure is expected to make the North Shore both more accessible and more attractive to prospective tenants.

Despite increasing accessibility, the withdrawal of secondary grade stock continued as residential developers looked to take advantage of Sydney’s booming housing market.

The smaller markets of Chatswood and Crows Nest-St Leonards now face somewhat of an identity crisis with an increased residential presence. On the other hand, Cushman and Wakefield point out that the quality of office stock, particularly in North Sydney, is improving rapidly.

The report found that in North Sydney, current prime grade net face rents are circa $690 per square metre, with gross incentives around 25 per cent.

The Crows Nest-St Leonards precinct is slightly more expensive at $550 per square metre compared to Chatswood’s $505 per square metre. Both have average gross incentives of circa 23 per cent. In Macquarie Park, prime grade net face rents are circa $360 per square metre, with net incentives circa 25 per cent.

The Property Council of Australia in July 2017 reported Macquarie Park vacancy rate increased 140 basis points to 8.5 per cent over the past year, although it remains significantly below the 11.2 per cent recorded in mid-2014.

On the investment front, the North Shore markets attracted strong activity with numerous assets exchanging over the year. In the second and third quarters there was an increase in assets for sale, contributing to $1.62 billion in sales volume.

[Related reading: Centuria Fund Spends $200m on NSW Office Assets]

Yield spreads between prime and secondary grade stock compressed over the year as residential developers made plays to acquire sites with development upside.

Cushman & Wakefield anticipate that Sydney metropolitan sales volumes will remain strong over the next 12 months as yield compression continues, albeit at a slower rate.

The report flags strong demand from domestic and other foreign investors, all operating in a long-term low interest rate environment.

OtherResidentialOfficeInfrastructureAustraliado not useReal EstateOther
AUTHOR
Editorial Desk
More articles by this author
ADVERTISEMENT
TOP STORIES
a land lease community home in white at a gemlife development, a type of home which could be the answer to the housing crisis
Residential

‘We are the Solution’: Land Lease Shake-Up Stirs into Life

Renee McKeown
5 Min
Korean coliving hero
Exclusive

Disconnection by Design: Why ‘Untech’ is the Next Big Amenity

Clare Burnett
5 Min
Global Shifts Redraw the Map for Australia’s Office Market
Exclusive

Office Eyes Slowdown as New Stock Supply Becomes a Trickle

Vanessa Croll
7 Min
Salta MD Sam Tarascio
Exclusive

Why Salta Won’t Break Ground on $400m Pipeline

Leon Della Bosca
7 Min
Exclusive

Precinct Proposals Bloom as Brisbane Middle-Ring Sheds its Past

Phil Bartsch
8 Min
View All >
Legal

Court Freezes Assets as $160m Property Scheme Unravels

Vanessa Croll
Industrial

Centennial’s Paul Ford: From Vision to Industrial Vanguard

David Di Marco
Planning

Bipartisan NSW Planning Reform a Welcome Surprise

Patrick Lau
The legislation, unexpectedly introduced with opposition support, has been greeted by the industry with surprise and del…
LATEST
Legal

Court Freezes Assets as $160m Property Scheme Unravels

Vanessa Croll
2 Min
Industrial

Centennial’s Paul Ford: From Vision to Industrial Vanguard

David Di Marco
3 Min
Planning

Bipartisan NSW Planning Reform a Welcome Surprise

Patrick Lau
5 Min
Darwin Sentinel Industrial East Arm Deal hero
Industrial

Sentinel Property Expands NT Portfolio with $57.4m Buy

Phil Bartsch
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/-sydney-north-shore-office-market-continues-to-climb