Sydney, 11 May 2015 – Developers are circling hundreds of thousands of square metres of soon-to-be-rezoned land surrounding Sydney’s new North West Rail Link with a view to capitalise on future high rise residential opportunities.
A new market review from CBRE highlights surging interest from developers seeking to conditionally buy land around eight proposed railway stations associated with the new link.
CBRE Western Sydney’s Alex Mirzaian said the agreements were generally conditional on land being gazette to accommodate high rise projects.
It has already proved to be a boon for some local land owners who have banded with their neighbours to sell multiple home sites to capitalise on developer demand.
“The new Rail Link infrastructure is driving a density upgrade to address the shortage of housing in the north-west,” Mr Mirzaian said.
“Developers are becoming increasingly aggressive, seeking to purchase strategically located sites conditional to gazettal and on the basis of longer settlements in order to de-risk these transactions.”
The Draft Sydney Metro Plan 2031 has identified eight new railway stations under the North West Rail Link Corridor Strategy. Showground Station, Bella Vista Station and Kellyville Station have been identified as priority precincts and are expected to be gazetted in the next 12 – 36 months, with Showground Station alone emarked for around 3,600 new apartments.
“Homes within an 800m radius of the new Rail Link Station Precincts are located within a study area, which will be reassessed for potential rezoning,” Mr Mirzaian said
“Savvy homeowners are consolidating properties in these precincts to create larger parcels with a view to capitalising on developer demand.”
CBRE’s Western Sydney Metropolitan Investments has negotiated $500 million in transaction in the past two years – with one-third of these being in the North West Region.
“That level of activity is continuing to escalate, with CBRE currently working on almost 100,000sqm of land that is positioned within the North West Rail Link Corridor Strategy area,” Mr Mirzaian said.
Recent CBRE transactions that have highlighted the strength of developer demand include that of a 15,900sqm site at Hector Court, Kellyville which was initially expected to fetch $8 million off market.
An on market campaign resulted in the site selling for $12.5 million, with a parcel of adjoining land later sold for $8 million following an Expressions of Interest campaign that attracted eight offers.
Other transactions include the Bull & Bush Inn at Baulkham Hills, which was purchased by Sydney developer Dyldam for $50 million to facilitate the development of several hundred apartments.
Additional sales include 56 Cudgegong Road at Rouse Hill – a 21,000sqm site with potential for a high density residential project of circa 300 units subject to the relevant planning approvals. It was sold as part of a deceased estate for $14.1 million.
Another landmark sale involved UrbanGrowth NSW’s disposal of a 12.02ha of Schofields land opposite the Schofields train station and adjoining the new Woolworths Shopping Centre. There were over 100 buyer enquiries and seven tenders lodged.
While the sale price remains confidential, Mr Mirzaian said the result was substantially above expectations.
A series of additional sites are currently being marketed, including six houses in one line at Baulkham Hills. The combined site is expected to fetch in the order of $15 million - $20 million underpinned by the potential to redeveloped the land, which is zoned R4 High Density, as circa 100 apartments.
CBRE’s North West operators Alex Mirzaian and Alex Ugarte have recently listed five new on market Expressions of Interest campaigns set to close before the end of financial year 2015.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
