Tenant Demand For Sydney CBD Office Space Moves South

The Midtown and southern precincts of the Sydney CBD are emerging as some of the most in-demand precincts for commercial space, due to the areas’ rental profile and vibrant atmosphere which distinguish them from the traditional financial core of the CBD.

CBRE has recently been involved with a series of lease agreements in the CBD’s mid-town region, including spaces at 66 Goulburn Street, 2 Park Street and 680 George Street which reflect this trendChris Fisher, CBRE Director Office Services, said a notable increase in tenant interest for offices space towards the Midtown and southern precincts has been identified.

“The vibrant atmosphere, access to retail amenities, proximity to public transport and availability of quality stock at competitive rental rates is underpinning the increasing tenant interest in the area.”

“World Square for example provides a comprehensive retail experience consisting of fashion, restaurants and bars in the heart of one of the most densely populated areas in Australia. There is always activity in this part of town, whether during the day or after hours,” Mr Fisher said.

Exemplifying this movement, 66 Goulburn Street has recently benefitted from a flurry of lease activity, with a range of businesses attracted to the quality A-Grade building. The building, which offers tenants column-free office space with excellent natural light at a competitive price point, has seen recent leases to Copyright Agency (1,500sqm), Credit Investment Ombudsman Limited (946sqm), OMG (946sqm), ICity Realty (205sqm), Joint Investment Funding Group (130sqm), Chatime (436sqm) and Megaward (443sqm).

Mr Fisher, who is appointed on the leasing of 66 Goulburn Street, noted that six levels of office accommodation have been leased in the short period since it was purchased by GDI Property Group in 2014.

“This substantial lease activity was further supported by increasing residential conversions in the area causing businesses such as Copyright Agency, which is relocating from a site earmarked for conversion at 233 Castlereagh Street, to consider alternative options in the Midtown CBD market.

“With the withdrawal of office stock or threat of withdrawal for residential conversions, tenants are being driven to locate alternative commercial sites, thereby increasing competition and demand in the Midtown and southern Sydney markets.”

The Midtown and southern sectors have further been successful in attracting tenants from suburban locations and the city fringe.

“High quality office buildings providing accommodations at competitive rental rates have encouraged the migration of outlying tenants such as Tabcorp and Freelancer to 680 George Street and Unilever to 2 Park Street,” Mr Fisher said.

“Overall, the influence of residential conversions, the migration of suburban tenants, the areas prime location, vibrant culture, high quality buildings, and more affordable price point than the core CBD, are attracting interest and activity in the Midtown and southern region from a variety of business sectors.”