The property market on the fringe of Sydney's CBD is gaining momentum as investors and tenants scour the areas from the east to the west and north for assets that generate high returns from stable tenants and also have development potential.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Vacancy rates in the office sector, while mixed, are falling as small to medium companies eschew the city for a site closer to home.
According to CBRE, in the current low stock level it's not uncommon to see any development sites and investment property for sale in the city fringe.
The group has three new offerings, one being the home of the popular Bill and Toni's restaurant in Darlinghurst.
In what has been called the "unofficial centre" of Darlinghurst at 72-74 Stanley Street, the building is being offered for sale with a 10-year lease term for the restaurant.
CBRE's director capital markets Nicholas Heaton, and city fringe specialists Michael Khouri and Gemma Isgro are selling the sites, which include the David Stein art restoration's three-storey commercial terrace at 32 Burton Street, Darlinghurst, and a property at 133-135 Bayswater Road, Rushcutters Bay.
"It's unknown if the David Stein commercial terrace will be developed into apartments, a large CBD house with city skyline views, or the home of a new commercial business," Ms Isgro said.
"But we expect it's going to be hotly competed for on auction day."
Mr Heaton said the site at Rushcutter's Bay was home to Michelle's, a "well-known gentleman's club", and he expects a "huge amount of interest from developers trying to get a position in the eastern suburbs market".
"Although the property has significant development upside it may also be purchased by an investor who wants to hold it for the long term, given the established tenant profile in the building," Mr Heaton said.
In the west, lease deals are also in demand; a property in the World Heritage-listed Parramatta Park has been announced for lease for the first time in more than a decade.
The property, owned by Parramatta Park Trust, is currently operating as a cafe and function centre.
Knight Frank's Alan James, associate director, office leasing, and Grant Bulpett, executive, office leasing, are managing the leasing process for the property, located on Byrnes Avenue overlooking the Parramatta River, on behalf of the Parramatta Park Trust.
According to Mr James, this is a "one-of-a kind property, offering an opportunity to house a wide range of uses".
"We are anticipating high-level interest from hospitality users or general retailers, but given the prominence of the property and its unique location, we could get interest outside of these areas.
According to Mr Bulpett, Parramatta Park receives 2 million visitors a year, including more than 100,000 people for community, charity and commercial events and festivals.
"Over the next five years a projected $10.8 billion will be spent to reshape Parramatta's CBD. At present there are 33 major projects on the drawing board, providing over 232,000 square metres of office space and over 7400 new residential dwellings. The property will benefit from these changes as the area will continue becoming a more desirable location to visit," Mr Bulpett said.
