The Parramatta CBD office market has been yielding strong results over the last couple years and current result highlight this.
A market which is well and truly amidst their construction phase with over 200,000sqm of office stock still destined to be added during a time of steady employment demand putting pressure on vacancy rates and improving rents achieved. New developments in office and continued residential development coupled with changes to infrastructure sees Parramatta a construction zone with road closures and cranes on the skyline (much like Sydney CBD) for the next few years.
The Parramatta office market has historically seen a greater withdrawal of stock rather than new development over the last five years. This has resulted from the redevelopment of older style office stock into residential accommodation reducing the office size from 702,721sqm in January 2013 to just 682,469sqm in July 2016. The completion of Charter Hall’s Parramatta Square Stage 1 has been instrumental in growing this office stock level back up to over 707,000sqm. This project also has seen absorption levels increase off the back of this 26,000sqm completion, fully leased to the University of Western Sydney bringing the 6 month take up to 25,546sqm. Looking ahead the outlook for new supply is strong with the remaining stages of Parramatta Square likely to add 152,000sqm alone. Other projects such as 105 Phillip Street which is currently under construction will see 25,000sqm completed in mid 2018 while Westfield Parramatta’s 35,000sqm approved developments timing is unknown. While on the demand side, the large vacation on Commonwealth Bank has been well documented with over 25,000sqm likely to be moved out of the market by 2020.