Education Sector Major Driver For Parramatta's Rapid Growth
Sydney’s ‘second CBD’ Parramatta continues to grow, with the latest leasing deals reinforcing the level of demand in the Greater Western Sydney hub.
The University of Western Sydney has pre-committed to 27,000 square metres of office space in Parramatta Square at 169 Macquarie Street.
KPMG is set to reopen an office in the area after 10 years, taking an initial 940 square metres at 91 Phillip Street with indications that they will look to expand. Raffles College of Design and Commerce is also set to occupy 5,000 square metres at 1 Fitzwilliam Street.
JLL’s Director of Leasing for Parramatta, William Tong, said, the Parramatta leasing market has remained stable across the third quarter of this year.
Demand from the finance and insurance sectors has slowed, however it is balanced by the increase in demand from the education sector and business services.
Education Sector
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“In addition to office and education use, residential activity plays a large part in the growth of Parramatta. Between now and 2020, there will be an additional 8,350 units constructed in Parramatta.
"An additional 50,000 new homes are to be built along Parramatta Road in the coming decades . This will have a multiplying effect across the region. There will be more construction, more activity and more economic growth.”
Mr Tong said any increase in office vacancy is expected to quickly be reversed early next year.
“It is expected that a slight increase in prime vacancy rates will be seen in Parramatta as tenants hand back space at 18 Smith Street and 2-12 Macquarie Street. However, we anticipate that this space will be absorbed quickly in early 2015.
“We expect demand from the education sector and SME business services industry will remain reasonably active until end-December, while demand from larger occupiers in other sectors will be moderate. As a result, we will likely see moderate increases in effective rentals in A-grade and B-grade assets,” concluded Mr Tong.
