Sydney CBD Commercial Strata Market Report – June 2021

As the Sydney CBD continues to re-populate post-2020, the overall demand for buying commercial strata properties has remained strong. With many businesses requiring a re-evaluation of their business accommodations to better suit changes within their individual markets, the market has experienced a new flow of eager buyers. However only some have been fortunate to secure such tightly held commercial strata stock in 2021 so far.

Corelogic Australia’s quarterly sales statistics report a total of 95 commercial office sales in the Sydney CBD over the past 12 months with a combined market value of $266,700,000. The average rate per sqm was $15,956, an 11% increase year-on-year.

Level 2, Shore Studios, 13 Hickson Road, Walsh Bay sold for $14,600,000 – April 2021

Prestige properties and whole floor offices have been a hot ticket item with buyer activity remaining strong, resulting in premium prices. A great example was Level 2, 13 Hickson Road, Walsh Bay. The commercial strata waterfront office attracted strong buyer enquiry, a competitive EOI process and a record-breaking sale of $14,600,000.

Many business owners are preferring to buy rather than lease their new office spaces. Although current leasing incentives to secure tenants may represent value and relief for many businesses, the switch from lease to mortgage enables them capitalise on interest rates which remain at record low levels, in order to secure property within a growing Sydney CBD.

We have seen the resurgence of auction campaign sales with the Noonan Property team recording a 100% clearance rate within the first half of the year. With strategic, well-managed and high-performing marketing campaigns, each property has undergone competitive bidding by multiple buyers, resulting in record breaking sales results up to $250,000 on top of reserve prices.

5 Hunter St, 300 George Street and 37 Bligh Street acquired by the NSW Government – May 2021

The recent withdrawal of over 180 strata suites from the NSW Government’s acquisition for the new Metro West station shocked the strata market. The acquired buildings at 37 Bligh Street, 300 George Street and 5 Hunter Street represent 15,400sqm of commercial strata space with an approximate market value of $300,000,000. The silver lining for existing property owners is that they now own an even rarer Sydney property asset and we can expect the move from the NSW Government to play a significant role in further price increases in the future.