The effects of the pandemic have been far-reaching and have fundamentally changed the way we do business. Off the back of this, many companies have been forced to make some tough decisions regarding their leased commercial real estate to identify savings.
This has spurred on a sharp increase in vacancy rates (from 5.6% in July 2020 to 8.6% in January 2021) largely due to:
Here’s what’s on the cards in terms of new refurbishments and stock in the Sydney CBD.
This new precinct over Wynyard Station offers two restored heritage buildings, a four-level public concourse, premium retail space and a 27-level 6 Star Green Star-rated office tower.
NAB has already pre-committed to this space (securing over 31,000 of the 86,000 sqm available), which is set to become their new head office and includes all office floors in the adjacent Shell House heritage building and levels 1-9 of 10 Carrington Street.
Premium office building that was completed in 2020 that is currently 40% committed and offers 7,300 sqm of office and retail space across 15 levels.
Circular Quay Tower, a new skyscraper currently under construction in Circular Quay, is destined to become Sydney's tallest office building (offering circa 54,000 sqm of space).
Recently dubbed "Salesforce Tower Sydney," the building has secured US software Giant, Salesforce as its anchor tenant, with the company pre-committing to nearly 50% of the available commercial space.
Scheduled for completion in 2022, The Quay Quarter development will span two city blocks and offer over 88,274 sqm of commercial, retail and residential space. More than a year ahead of completion, over 85% of the commercial stock has been pre-committed by anchor tenants AMP, Deloitte and top tier law firm Corrs Chambers Westgarth.
Construction of this new A-grade office tower, which saw initial construction delays, is currently underway, consisting of 19,700 sqm of office space (27-storeys) and 1,000 sqm of retail.
It’s anticipated that an additional 50,000 sqm of refurbished stock will come on the market by the end of 2021, including 2 Market Street with Amazon committed to the building. 44 Martin Place and 570 George Street are also expected to be available by the end of the year. However they do not currently have any major commitments.
Once the refurbishments are complete, landlords are likely to scale back upgrades and refurbishments to fill in existing vacancies and new vacancies being created by tenants moving into new stock.