With residential development, and the compulsory acquisition of multiple North Shore and Sydney CBD properties – approximately 27,600 sqm of stock is slated for demolition in 2017, with some of this to make way for the new “Victoria Cross” train station in North Sydney, as part of the Sydney Metro project. The displacement of tenants and owner occupiers is bringing demand to an all-time high. With next to nothing in the market and rents growing, the North Shore prices have seen a dramatic rise, especially in North Sydney.
The North Sydney market has had a significant increase in tenant demand, furthering the uplift for vendors right along the North Shore. Jacobs, Goodman Fielder and Vodafone have recently relocated/consolidated into North Sydney, whilst Leighton Holdings consolidated from 11 buildings across Sydney. In addition, Channel 9 has officially announced its move to North Sydney from Willoughby, occupying Winten Group’s 1 Denison (60,000sqm) scheduled for completion in early 2020, further proving the returned strength of North Sydney’s office market.
On the back of this market, PropertyFox offered a 141 square metre strata office at 12 Mount Street, North Sydney to Auction last week – the property is tenanted by an accountancy firm and both investors and owner occupiers competed for the property with magnificent views of Sydney Harbour and the CBD Skyline – the property sold under the hammer for $1,120,000 equating to $7,943/sqm, with a record low yield of 3.97%, whilst also breaking the 12 Mount Street Building Record for the 2nd time in six weeks! The vendor had accepted an offer of $950,000 just six weeks earlier through another agent, not realising how much the market had moved in a short period of time.
This is the 3rd suite sold by PropertyFox in the building in the last few months. With the previous 2016 record at $4,969/sqm, the two recent sales at $7,660 and $7,943/sqm were exceptional results.
Lachlan Worthington, Executive of PropertyFox said that only two years ago, North Sydney strata prices averaged about $5,000/sqm and with little existing and/or future supply in the pipeline, combined with ever increasing demand – rates most likely have some growth to go.