“We typically only see these office spaces come to market when an owner leaves the workforce.”
Watson said we are seeing building and city records consistently broken and large increases in capital growth realised as owners take advantage of strong sector conditions.
“Liquidity of premium stock remains strong, particularly in the top echelon of Sydney’s strata stock. Further, the suites in the prestigious BMA House are so tightly held, driving returns to even higher levels,” Watson said.
JLL office leasing NSW senior executive William Conry has been appointed to advise on the lease of five tenancies in BMA House, also setting benchmark rents.
“The scarcity of strata office suites in Sydney has only increased since the acquisitions made by the NSW government to make way for the city’s Metro West stations,” Conry said.
“This has placed upward pressure on occupier demand for strata office space and has resulted in a surge in rents.”
CBRE associate director Harry George and associate director Angus Windred said there has been interest from local, interstate and international groups, with a resurgence of interest from Asian-based investors in high-end commercial investment opportunities.
George said the interest from Asian-based investors has been highlighted by the recent off-market sale of the Level 10 penthouse office at 64 Castlereagh Street for $6.6 million. It was purchased by an offshore-based private group through Windred and George.
That transaction reflected a sharp 2.94 per cent net yield and set a new Australian whole floor record rate of $24,000 per sq m for a strata floor without water views,” George said.
He added that the reduction in strata stock in the CBD was helping to underpin demand for high-quality strata opportunities. “Since 2016, approximately 30 per cent of the CBD’s existing stock has been removed from circulation due to amalgamations for tall tower developments,” he said.
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