Opportunities in the spotlight at Sydney Olympic Park

Sydney, 8 March 2014 – The evolution of Sydney Olympic Park is continuing apace as investors, developers and occupiers target opportunities in the precinct.

While much of the recent focus has been on residential development opportunities, the precinct’s commercial potential has also been in the spotlight following a series of recent leases and the development of major office projects such as The Avenue.

Mixed use sites are also on the radar with the upcoming sale of 6 Figtree Drive – a site which incorporates existing office facilities but also has additional land suited for a significant high density residential project.

On the commercial front, CBRE Director Stephen Panagiotopolous said several recent leasing deals to occupiers such as Tutt Bryant and Herbalife had reduced the office vacancy rate in Sydney Olympic Park to less than 1%, making it the lowest vacancy rate in the Sydney commercial market.

“This is vastly different to competing markets such as Rhodes and Macquarie Park and is underpinning developer and investor interest in the precinct, buoyed by the level of leasing activity that is occurring,” Mr Panagiotopolous said.

Sydney Olympic Park’s next major commercial project, The Avenue, aims to capitalise on the level of tenant demand and minimal supply.  The twin building complex provides 8,500sqm of office space in the first stage fronting Herb Elliott Avenue and is due for completion in May. It is being offered to market by CBRE and GJS Property.

Jason Wright, director of GJS Property, said the project, located in the heart of the Town Centre, had generated strong tenant interest, with the building designed to achieve a 5 Star Green Star rating and a 5 Star NABERS rating.

“Sydney Olympic Park benefits from its location at the geographic centre of Sydney and its high level of amenity – not the least of which is the 430 hectares of associated parkland and its world-class recreational, retail and sporting facilities,” Mr Wright said.

“This has been one of the key draw cards for tenants, alongside the area’s connectivity via efficient public transport options and major arterial roads. At present, there are over 14,000 people working in the precinct for organisations such as the Commonwealth Bank of Australia, Sydney Water, Samsung Australia, Thales, Railcorp and QBE. With just one 400sqm office suite currently available, upcoming projects such as The Avenue will cater to pent-up demand for leasing opportunities.” 

The level of tenant demand has also underpinned interest in existing  investment/development opportunities such as 6 Figtree Drive, which is presently being marketed for sale through CBRE’s Matthew Ramsay and Frank Oliveri in conjunction with David Inkster from PRD Nationwide (Norwest).

The property currently incorporates two high profile buildings occupied by the NSW Institute of Sport and Sports & Recreation NSW.

The buildings form part of a site totaling 11,740sqm, which has been earmarked under the Sydney Olympic Park Master Plan 2030 to allow for high density residential development, commercial and retail space within close proximity to Olympic Park railway station.

Expressions of Interest in the Figtree Drive site close May 15, 2014.

PRD’s Mr Inkster said the site provided a significant opportunity for a forward thinking developer/investor.

“The site offers a rare opportunity for a discerning buyer, who can choose to secure government tenants for the existing buildings and/or redevelop with residential expansion in mind, generating a blue chip income stream from a 5-Star NABERS rated A Grade building while construction is undertaken,” Mr Inkster said.

“The site is located in Master Plan 2030’s ‘Central Precinct’, which is earmarked to be progressively transformed into a high density mixed use neighbourhood with commercial office, retail and residential uses. It’s close to the commercial office precinct and is within walking distance to the train station, public amenities and all the major sporting stadiums, including ANZ Stadium and Allphones Arena.

CBRE’s Matthew Ramsay said the transition of the Sydney Olympic Park precinct under Master Plan 2030 was providing a range of exciting opportunities in an area that was already benefitting from existing infrastructure, retail and entertainment amenity, and its proximity to public transport.

“We expect 6 Figtree Drive to generate strong interest, particularly from groups who own buildings or who have existing projects within the Park,” Mr Ramsay said.

“Other private groups and larger investment companies, including both listed and unlisted property funds, are also expected to compete for the site given the existing tenant income and future development potential. This will also appeal to offshore investors and developers.”

One of the key metrics for developers will be the strength of the residential market in Sydney Olympic Park, with apartment sale prices having risen more than 15% in the past 12 months.

Mr Ramsay said one-bedroom apartments were selling for up to $600,000 to $650,000, with two-bedroom apartment fetching prices of up to $1 million and above.