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WHY MACQUARIE PARK COULD BE SYDNEY’S HIDDEN GOLDMINE


The secret is well and truly out when it comes to commercial property investment in Sydney.

 

With values continuing to spiral upwards across most asset classes and investors quick to jump on anything that moves, finding an edge in a booming marketplace is an ever-increasing challenge.

 

But cast your eyes west and there are opportunities that investors and developers are yet to tap into, according to GJS Property Director Chris Bailey.

 

Bailey says the Macquarie Park and North Ryde area, 15km west of the CBD, is crying out for more commercial space, with intense demand but not enough buildings to satisfy it.  All it needs is developers who are prepared to build.

 

“Now is the time to start building again. Excluding some quality refurbishment projects, there hasn’t been a true new speculative development since probably 2008,” Bailey says.

 

“There have been some developments but these have been purely pre-commitment driven. In days gone by, pre-GFC, institutions / developers would build a building on a speculative basis, whereas nowadays they’re very reluctant to do that. However, there’s a real opening in the marketplace for somebody to build and to take advantage of the tightening market conditions.”

 

HOUSING BOOM CREATES COMMERCIAL SHORTFALL

 

The squeeze on commercial space in Macquarie Park has been exacerbated by the recent rezoning of large tracts of commercial land around Macquarie Shopping Centre, which are due to be developed into residential apartments.

 

Bailey says the decline in commercial space means the time is now right for commercial developers to move in and do more with existing pockets of commercially-zoned properties.

 

“It’s now starting to turn the market in favour of landlords rather than tenants,” he says.

 

“As an example, the likes of Olympus and 7-Eleven have relocated out of 82 Waterloo Road (Macquarie Park) but have also wanted to stay as close as they can to the Shopping Centre so they’ve taken space at 97 Waterloo Road, which is the first building that sits out of the rezoned area and is currently being fully refurbished.”

 

TIME TICKING FOR DEVELOPERS

 

Some institutions /developers are already starting to gear up Bailey says, with Dexus planning a development of a 30,000sqm building at 11 Talavera Road, Macquarie Park. But with build timelines of around 18 months to 24 months, there is still a critical shortfall of available properties.

 

Bailey says the most potent demand is from tenants searching for either office space of less than 600sqm or upwards of 2500sqm of contiguous space, which is becoming increasingly hard to come by.

 

“The activity levels are pretty strong in those areas; the sub-500sqm range is active and there’s been a significant decrease in available stock in that size range,” he says.

 

“And more importantly is the , activity in the larger contiguous space, circa 2500sqm-plus, where again there’s probably only five options available in the marketplace of that size and above in Macquarie Park and North Ryde.”

 

 

If you would like further information on the above article please do not hesitate to contact Chris Bailey on 0437 302 322.