Savills head of research Phil Montgomery believes the value proposition in the Alexandria area is a compelling proposition for tenants who want close proximity to the city without paying the high CBD office rents.
“I expect that by 2022-23, A-grade Sydney CBD gross rents will be between $1450 and $1500 per sq m as opposed to a 40-50 per cent differential for similar-grade property in Alexandria and Green Square in South Sydney,” Mr Montgomery said.
“We believe Sydney’s south-eastern fringe provides good relative value, complemented by quality residential projects bringing in population density and amenity, serviced by the new Metro Rail system, which is improving mobility and serviceability.”
CWE Sydney principal Matthew Ellison said there had been an inflow of corporations moving to new developments at South Everleigh and Waterloo to occupy the transformed South Sydney area.
“South Sydney is rapidly changing into a dynamic destination in its own right and Markham’s campus is one of the first commercial projects in Alexandria to take advantage of everything this exciting new precinct has to offer,” he said.
Markham’s campus-style office building will offer tenants an open internal atrium area spanning all floors, and a green balcony that will function as an open-air and relaxation space.
Office space in North Sydney is in high demand from an increasingly wide range of tenants due to its strategic location, relative affordability and access to transport, according to the latest research from Knight Frank.
The Knight Frank North Shore Office Market Overview September 2019 found North Sydney was attractive to technology and media companies, with these tenants accounting for 34 per cent of leasing activity since 2018.
“Strong demand from tech companies is expected to drive positive take-up levels over the next two years in North Sydney,” said Knight Frank partner and head of office leasing north shore Giuseppe Ruberto.
“Microsoft, SAP, Nextgen.net, Nokia, Citrix and Zurich are a few recent examples of companies trying to scale and set up headquarters in the area.”
Mr Ruberto said amid the tech companies underpinning leasing, other industries are also very active, with financial and insurance services comprising 20 per cent of take-up and professional, scientific and technical services making up 15 per cent of new deals.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.