This project is indicative of the growth in the city fringe
areas, which is expected to remain strong, despite the weaker outlook for the
general commercial property market.
When completed the area will rival that of Pyrmont as a
media hub.
The headquarters for Seven, the ABC, Network 10 and Fairfax
Media, publisher of the Herald, will remain at Pyrmont. The Nine Network was to
move from Willoughby to Moore Park,
but changed its mind at the last minute.
Moving to the suburbs and the city fringe is becoming more
popular as employers pay lower rents, while giving staff more amenities such as
car parking and campus-style, relaxed office space.
The 8 Central
Avenue development is 38,000 square metres of net
lettable area and comprises an 11-storey media and office complex. The 12,000
sqm of space on the top four floors are now being pre-leased through CB Richard Ellis and Chesterton International.
On completion of the project in early 2010, the rent will be
$400 a square metre. Construction is now underway through Watpac Constructions.
The anchor tenants, Seven Network, Global Television and Pacific Magazines,
will lease in total 25,000 sqm, over the first seven levels of the building,
for production studios and offices.
The principal of Rebel, Allen Linz, said the development was
already receiving strong interest from a range of media and non-media companies
keen to secure large floor plates only 10 minutes from the city and airport by
car or public transport.
Research by CBRE has shown that there is a great deal of
commercial and residential activity in Redfern. There is an influx of creative
services groups and a range of community facilities being developed or
re-furbished by the NSW Government and City of Sydney council.
These works include the planned upgrade of Redfern railway
station, the 180,000 sqm North Eveleigh
redevelopment, the $20 million upgrade of Redfern Oval on Elizabeth Street and the redevelopment of
Souths Leagues Club.
CBRE’s Oliver Freed said data showed rents were expected to
increase 20 per cent over the next year, while prices would show similar
growth, as the area continued to be good value compared with other business
parks around Sydney.
“The low vacancy rate and rising rents in the CBD have
been positive for the suburban and fringe office markets. Many tenants now want
to move out of the CBD or move their back office operations to areas like
Redfern,” Mr Freed said.
In its latest report, CBRE said that across the Sydney metropolitan area
there was about 789,000 sqm of suburban office space that was forecast to enter
the market from 115 projects. The bulk of that new supply was concentrated in
the city fringe region, which represented 30.7 per cent of total supply.
James Wish, of Chesterton International, said that Redfern’s
commercial property sector had lagged behind the strong price and leasing
growth of other city fringe areas, but that was changing with projects such as
the Australian Technology Park, which covered about 14 hectares and had more
than 1000 people working for a range of organisations from government
departments to small computer graphics operators.
The park continues to attract blue-chip tenants, including
the Defence Department, the University
of Sydney,
Hewlett-Packard and Johnson & Johnson.
Seven will be moving from its current facilities at Epping,
allowing for the redevelopment of the precinct, while Global will be moving
from North Ryde and Pacific Magazines from
Milsons Point.
CBRE’s Paul Salsano said the report showed that vacancies
were also declining in the traditional media area of Pyrmont-Ultimo, hitting an
all-time low of 2.8 per cent.
“The fringe of the city has been particularly
attractive to larger tenants requiring in excess of 500 sqm of space,” Mr
Salsano said.
He said competitive rentals were one of the key drawcards
for tenants reviewing projects in the city fringe market.
Indicative rents for new space in the Pyrmont-Ultimo area
ranged from $450 to $525 gross per sqm, which was significantly below
comparable space in the CBD.
The increased tenant demand is being capitalised on by
developers such as FKP Property Group, which is in the process of redeveloping
the former Crystal House building in Ultimo as The Hub on Harris.
CB Richard Ellis
and Tim Green Commercial have been appointed to lease the 2800-sqm project on
the corner of Harris and Macarthur streets.
North of the city there has also been a rise in demand for
space at St Leonards, Colliers International says.
Tim Fox, executive of investment sales at Colliers
International, said he was already seeing the start of overflow movement into
the St Leonards area as the high absorption of space in North
Sydney pushed up rents and left limited options particularly for
smaller tenants.
“There have been three sub-$15 million transactions
since the start of 2008 which is on par with 2007 which also had three transactions
at this time. I think the increasing demand out of North
Sydney combined with the relative value of the market for cashed
up private investors will mean activity remains on par this year,” Mr Fox
said.
“Our records show that 12 freehold commercial transactions
were completed in St Leonards in 2007, ranging in price from $1.75 million to
$24.5 million, with rates ranging from $3274 sqm to $5307 sqm. This year has
seen three sales made in the area.” Mr Fox said this included one sale
made to an owner-occupier for $3.65 million at 67-69 Nicholson Street. Rates for these
sales have ranged from $3900 a sqm to $5954 a sqm.
Source:
http://business.smh.com.au/redfern-to-rival-pyrmont-as-a-hub-for-media-20080711-3drp.html
See Also Media Release: Redfern Set to Become a Major Business and Media Hub