Savills' latest data revealed that the Sydney CBD office market has been a standout due to its vacancy rates being the lowest in Australia, and its performance in both capital values and rental growth.
Sydney CBD’s investment performance differs from every other market in the country due to its landlocked nature and lack of greenfield development sites.
With vacancy currently at a low of 5.9 per cent, coupled with a negative expectation of further tightening, rents showed double-digit effective growth over the past two years and have risen to record levels.
[Related reading: National Residential Vacancy Rates Fall in August: SQM]Given forward indicators and a distinct lack of short term supply, Savills' data suggested that this trend will have further to run, while investor demand for quality assets remains strong in the Sydney CBD, particularly from Asian investors.
Sydney's CBD strength has prompted a B-Grade commercial office building to hit the market next month, through Graeme Russell, Simon Fenn and Ben Azar of Savills and Vince Kernahan, Tom O’Neill and James Barber of Colliers International, on behalf of local property investor, Stephen Burcher, of the Burcher Property Group.
160 Sussex Street is a renovated 15-storey office building comprising 8,269.6 square metres of net lettable area on an 853.6 square metre site, overlooking Darling Harbour with an approximate net income of $4.6 million.
160 Sussex Street is situated between King and Market Streets in the Sydney CBD’s Western Corridor, the precinct which is witnessing the highest net effective rental growth, according to Savills Australia director of capital transactions Graeme Russell.
“What is happening within the Western Corridor precinct is changing the dynamics of the Sydney CBD," Russell said.
“The commitment by both public and private sectors promises that this precinct will bring a new standard of working and living to the area with 160 Sussex Street perfectly positioned to benefit from this development activity.
"New construction worth billions in office, residential, hotel, transport, infrastructure and entertainment developments in the area gives Sydney a new focal point," he said.
Images courtesy Mark Merton Photography