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Low supply in North Sydney sees record rates

Property Markets / Outlook

Australia

Jul 04 2017

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With large corporates moving in or expanding across North Sydney and buildings marked for demolition to make way for the new Sydney Metro station, demand for office space on the other side of the bridge is running hot. 

Sydney’s other CBD is already home to Coca Cola Amatil, MLC, and Zurich, to name a few. Jacobs, Goodman Fielder and Vodafone are also now based there and COMIC (formally Leighton Holdings) recently consolidated from 11 buildings across Sydney to one on the Pacific Highway. In addition, Channel 9 officially announced plans to move into Winten Property Group's development in Denison Street.

Compulsory acquisition of multiple North Shore and Sydney CBD properties equating to approximately 27,600 sqm of stock to make way for the new “Victoria Cross” train station in North Sydney, has also left many tenants displaced.

"With next to nothing in the market and rents growing, the North Shore prices have seen a dramatic rise, especially in North Sydney,” says Lachlan Worthington from PropertyFox.

Mr Worthington points to recent sales as proof that strength has returned to the North Sydney market.

“We offered a 141 sqm strata office at 12 Mount Street at auction last week, a property tenanted by an accountancy firm and with magnificent views of Sydney Harbour and the CBD. Competition between investors and owner occupiers was fierce and the property sold under the hammer for $1,120,000 equating to $7,943 per sqm, with a record low yield of 3.97%.” 

“This sale also broke the 12 Mount Street building record for the second time in six weeks. The vendor had accepted an offer of $950,000 just six weeks earlier not realising how much the market had moved in a short period of time,” he says.

"This is the third suite we’ve sold in the last few months. With the previous 2016 record at $4,969 per sqm, the two recent sales at $7,660 and $7,943/sqm were exceptional results.

“Only two years ago, North Sydney strata prices averaged about $5,000 per sqm and with little existing and/or future supply in the pipeline. Increasing demand means rates most likely have some growth to go."

 

SOURCE: Press Release

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