The North Sydney market is undergoing a revitalisation with a significant infrastructure spend.
CBRE Global Investors Australia/NZ MD Chris Johnston
Rents remain competitive in North Sydney compared with the city and that has attracted new domestic and overseas investors.
In the latest Real Capital Analytics’ Asia Pacific Capital Trends report for the third quarter, Australia again topped the quarterly ranking for commercial real estate investment transactions in the Asia Pacific region, despite a 12 per cent year-on-year decline to $US6 billion ($9 billion).
David Green-Morgan, RCA’s managing director for Asia Pacific, said Australia performed relatively well in the three months ending September.
“It saw large and smaller deals and the flow of international capital remains strong. Activity is steady and it will be a good year all round,” Mr Green-Morgan says in his report.
“With Australia joining the ranks of countries cutting interest rates, and more quantitative easing on the horizon in Japan, investments in real assets remain appealing.”
Upon completion in 2024 the 21,012 square metre Zurich tower will boast the usual cafes and end-of-trip facilities and will feature high sustainability credentials, targeting a five-star NABERS Energy rating and five-star Green Star rating.
“The North Sydney market is undergoing a revitalisation with a significant infrastructure spend,” Chris Johnston, managing director-Australia and New Zealand, CBRE Global Investors, said.
“Additionally, construction of the new Victoria Cross Metro station and a new Metro rail link connecting North Sydney station to Barangaroo and Martin Place, due to complete in 2024, will greatly enhance North Sydney’s ability to attract top-tier tenants.”
Other new entrants to the area include the Dexus site at 100 Mount Street, which is anchored by NBN and the adjoining under-construction 1 Denison Street skyscraper, which is to be the new home for the Nine Entertainment Co, the owner of this publication.
Reto Buehler, Zurich’s head of real estate of Australia said with the sale and leaseback of 118 Mount Street, the property will provide the Australian business with new purpose-built headquarters.
Cushman & Wakefield international directors of capital markets Australia & New Zealand, Richard Butler and Mark Hansen, represented Zurich in the transaction.
Mr Hansen said the North Sydney office market continues to be a destination of choice for global capital, having attracted more than $1 billion in investment in the past 12 months from Singapore, the US, Britain, Hong Kong and mainland China.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.