Parramatta Crane Survey: Unprecedented commercial development attracting jobs to geographic heart of Sydney has been saved
Parramatta Crane Survey: Unprecedented commercial development attracting jobs to geographic heart of Sydney
8 December 2017 – Developers are repurposing residential sites to meet an increasing demand for high quality commercial developments at a time of historically high infrastructure investment in Parramatta, according to new analysis from Deloitte of the Parramatta development market.
The inaugural Parramatta Crane Survey revealed an unprecedented level of construction in Parramatta, identifying 39 developments. Across these developments, the survey discovered:
- 92,000sqm of office floor space currently under construction
- Zero vacancy rate for A-Grade office space with total vacancy rate at 4.3% compared to 5.9% in the Sydney CBD
- Apartment construction is slowing with only 1,100 DA approved apartments in the pipeline - 63% less volume than currently under construction
- By 2020, 857 new hotel rooms will have been built across 4 projects.
Survey author and Deloitte Western Sydney’s Real Estate Leader, David Hagger, noted that the shift of momentum towards commercial development, away from residential, will continue to attract higher paid jobs to Parramatta.
“The Parramatta Square development alone could house over 20,000 workers, with around 10,000 more expected across the rest of the city. Many of these will be public servants, with the NSW Government being the anchor tenant after making the largest pre-lease commitment we have ever seen. Importantly, we are also seeing an influx of private sector companies, including the high profile move by NAB to make Parramatta its second home, with a number of other businesses now circling for space in the remaining repurposed commercial building on Parramatta Square."
“It is great to see the NSW Government embracing Parramatta as Sydney’s second CBD through the relocation of departments and their workers, and significant investment in transport and social infrastructure. Their focus on supporting jobs growth in Western Sydney, together with competitive rents and a historical lack of supply of premium grade office space, is creating a strong demand for new commercial development,” said Hagger.
Ongoing investment and rising job numbers should in turn continue to underpin growth in the residential market. The survey reveals that there are currently 2,707 apartments under construction in the Parramatta CBD, due for completion between 2018 and 2019. With a further 4,865 apartments proposed across 12 projects, a potential ‘flood’ of the market is being predicted. According to Hagger, however, the survey indicates a different outcome.
“We see the market entering a cooling phase. There are only 1,110 apartments with DA approval in the pipeline, providing ashort-term supply of approximately 2-3 years, indicating lower risk of oversupply. Developers are adjusting to changing market conditions - including limits on lending by banks, increases in stamp duty and land taxes and restrictions by Chinese regulators on outbound investments in real estate to name a few - and also note a clear shift towards commercial development. The pool of proposed apartments does represent a significant potential supply. However, these are not yet committed. Given the current investment into commercial office space and transport infrastructure, we see potential for this supply to be unlocked after 2020."
The findings of the Parramatta Crane survey demonstrate the significant progress being made towards achieving the target of creating 200,000 new jobs in Western Sydney by 2020, set out in Deloitte’s 2015 Shaping Future Cities (SFC), Designing Western Sydney blueprint.
“Deloitte collaborated with many stakeholders, including government, to prepare the blueprint which sets out a vision for Western Sydney with more jobs closer to where people live – critical given the additional one million residents forecast for the region by 2031,” said Hagger.
“Plans to expand the Riverside Theatre, move the Museum of Applied Arts and Sciences to the banks of the Parramatta River and construct a new 30,000 seat stadium are all in place, with the Parramatta Light Rail connecting people between these amenities, the Westmead Health and Education precinct and Sydney Olympic Park. Future investment in Badgery’s Creek airport and the Metro Sydney West project will provide an additional boost in the coming decade. The provision of infrastructure and social amenity, which just wasn’t there one or two years ago, is driving both commercial interest and population growth and we are excited to see Parramatta becoming a truly thriving city, not only at the heart of Western Sydney but the geographic heart of Sydney, and finally fulfilling its long-held potential,” said Hagger.
About the Survey
The Deloitte Real Estate team undertook research on the number of developments underway in the Parramatta Central Business District and is accurate to the best of their knowledge as at 30 September 2017. Where possible the data has been verified directly with the developer or cross-checked against other sources. To learn more download the full report here.
About Shaping Future Cities
Deloitte has been instrumental in driving collaboration between 400 contributors towards the first ever business-led plan for jobs creation in Western Sydney, and released the paper providing the blueprint for development in 2015. To learn more visit Shaping Future Cities.
NB: See our media releases and research here.