Leasing momentum is building in the North Sydney office market, with a series of recent deals highlighting a genuine reluctance on the part of many long-standing occupiers to consider a move across the bridge.
The likes of Microsoft, Nine Entertainment Corporation and Ooh Media staked their claim on new office space in North Sydney in deals totalling more than 50,000 sqm throughout 2019.
We are working on several additional leases that are expected to set new benchmarks for the North Sydney market, and we’ve seen a groundswell of business confidence. Tenants are prepared to sign up for longer leases and capitalise on opportunities to update their office accommodation.
There is an embedded culture with many occupiers, who like the convenience of being in a lower north shore location, close to schools and providing a good work/life balance.
Very few tenants looked to jump ship in 2019 and relocate to the CBD. Our analysis of last year’s lease deals showed that just 8% of relocating tenants elected to move across the bridge; most moves involved companies expanding into better quality North Sydney buildings.
Microsoft’s recent commitment to the 1 Denison Street project has further legitimised North Sydney as a tech hub. It has already led to an increase in enquiries from this sector, including some businesses currently located in the Sydney CBD.
We expect to see continued interest from major organisations identifying North Sydney as a preferred location to call home in 2020. Particularly Sydney CBD occupiers that will be attracted to North Sydney’s improving amenity, connectivity and the availability of brand-new office accommodation with up to a 30% parity to CBD rents.
It is quickly becoming the location of choice for organisations to attract and retain talent, as North Sydney transforms from North Sydney to Sydney North.