Infrastructure Boom Propels Office Demand in Sydney
New South Wales infrastructure boom is well under way, with the state’s infrastructure projects doubling in value from $40 billion to $80 billion over the past two years.
And the boom is driving increased demand for leased office space from engineering and construction firm across the state, according to CBRE research.
The Chinese-backed John Holland is a prime example – taking a number of office leases across the Sydney CBD, St Leonards and surrounding areas with a total footprint of over 8,600sq m.
Most recently, the construction and engineering firm leased 3,000sq m at 100 Christie Street, St Leonards at $280 per square metre, in addition to the 5,600-plus square metres leased across three different sites in the Sydney CBD.
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With more infrastructure projects under way than any other state or territory, CBRE office leasing director Stuart McSorley has seen the flow-on effect in increased enquiry and recently-completed office transactions.
“Over recent months, there has been a significant upturn in office lease enquiry, with an average size of 2,000sq m from engineering and construction companies,” McSorley said.
New office supply will be closely linked to major metro hubs such as Pitt Street, Central Barangaroo, Victoria Cross in North Sydney and Central Station.
The $30 billion public transport project is expected to open up opportunities to increase capacity for office markets such as Norwest, Chatswood and Macquarie.
According to the Property Council of Australia’s recent office market report, Sydney’s CBD office vacancy rate is at its lowest in more than ten years, with BIS Oxford Economics forecasting an office vacancy rate of just 3 per cent by the end of 2019.
Recent major leases include Lendlease and Leightons taking 8,000sq m in Mascot, while French construction giant Bouygues and global engineering consulting firm Golder are actively seeking office Sydney office space.
