Macquarie Park comes on strong CAROLYN CUMMINS COMMERCIAL PROPERTY EDITOR April 2, 2010
MACQUARIE Park, North Ryde's commercial property district, has been one of the fastest-growing areas in terms of leasing and sales over the past five years and while activity has slowed recently, demand remains at a high level compared with neighbouring suburbs.
In January 2005, the Property Council of Australia (PCA) measured the market at 526,573 square metres; by January this year, the total market had grown to 783,257 square metres - a 33 per cent increase.
In the figures for the six months to the end of January, the vacancy rate stood at 12.2 per cent, according to the PCA report.
The area is home to a range of companies, including Optus, Woolworths and Oracle. It comprises a mixture of business parks, warehouses and offices and is popular for its infrastructure, which gives it good access to Sydney's CBD, west and south.
The director of Colliers International's North Sydney office and director of business space, Mark Martin, said leasing deals in the area this year had totalled 14,500 square metres. The main lessees include the BBC, at 6 Eden Park Drive (2000 square metres); Schneider Electric, at 78 Waterloo Road (7885 square metres); Compuware, at 4 Drake Avenue (1600 square metres); and Kordia, also at 4 Drake Avenue (2400 square metres).
''These transactions alone account for a reduction in the vacancy rate in the order of 10 per cent,'' Mr Martin said.
''Typical transactions for quality A-grade accommodation involve rents up to as much as $320 per square metre [per annum], with rent incentives generally in the order of about 30 per cent and trending downwards.''
The CB Richard Ellis director of industrial and office parks, Simon van Grootel, recently said the activity would drive a quick decrease in the Macquarie Park area's vacancy rate, which was forecast to dip below 10 per cent by mid year.
''Unlike many of the other office markets, landlords in Macquarie Park are not facing the same competition from the sub-lease market, with sub-lease vacancy having reached its lowest level in five years,'' Mr van Grootel said.
According to Mr Martin, in the past 40 years, the main commercial precincts of North Sydney, St Leonards, Chatswood and North Ryde have collectively grown to comprise 2.27 million square metres of commercial accommodation.
''In the short term, we see major commercial growth occurring where availability of land and planning policies are favourable and where tenant demand is strongest. Business-park precincts will be the main beneficiaries of urban growth on the North Shore, including Macquarie Park, Rhodes, Homebush and Norwest,'' Mr Martin said.
''As an example, Macquarie Park has about 500,000 square metres of approved or mooted development, much of which could be developed in the next four to five years. We expect supply will tighten quickly this year, with the expectation that vacancy rates will be about 5 or 6 per cent by late 2010.''
Mr Martin said rent was forecast to rise about 3 per cent per annum by next year and as much as 4 per cent by 2012 as tightening supply really started to bite.
