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Lane Cove Office Building Expected to Sell for $55 Million

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Private company Develco has taken advantage of tightening North Sydney office markets, listing an office building in Lane Cove with the expectation it will sell for more than $55 million.

With a combined site area of 16,860 square metres, the property includes a nine-level office building of around 9,250 square metres at 18-20 Orion Road, and a separate land holding of 7,922 square metres at 16-18 Orion Road.

The land holding has approved DA consent for a significant commercial development of 15,800 square metres of GFA. Almost fully leased (92.2%) with a 3-year WALE, the quality office building boasts high-profile tenants including Motorola, Netcomm Wireless and Dental Corporation (BUPA).

The sale of the property is being managed by Knight Frank’s Angus Klem, Arland Domingo and Dominic Ong.

“In the longer term, this property offers investors a chance to get in on the ground floor of Lane Cove’s fast-growing office market," Knight Frank North Sydney Managing Director Angus Klem said.

"With rising rents pushing tenants out of the CBD and North Sydney into the outer suburbs, the development potential offers investors the opportunity to capitalise on future demand.”

Knight Frank Senior Research Manager Alex Pham said the significant withdrawals across the North Shore and CBD market has resulted in tenant displacement and strong effective rental growth.

“The significant levels of stock withdrawals continue to benefit the Sydney suburban office market.

"Over the 12 months to July 2017, a total of 57,428 square metres of secondary stock has been withdrawn across the North Shore and Macquarie Park market.

"In conjunction with 126,907 square metres of secondary stock taken offline in the Sydney CBD, this has resulted in tenant demand cascading to the suburban markets and strong effective rental growth.

"The average net effective rent in the Suburban North market, including Lane Cove, has increased by 11.18% over the past 12 months."Klem predicted the property would transform into a mixed-use space for millennials, 10 or more years into the future.

The whole Lane Cove Business Park is set to benefit from the transformation of the North Shore with $73.4 billion being spent on infrastructure over the next three years.

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Article originally posted at: https://theurbandeveloper.com/articles/lane-cove-office-building-expected-sell-55-million