Believe the hype, Parramatta City continues to be the engine room of Australia’s most significant economic growth region; a vibrant home of diverse communities and a centre of excellence in research, education and enterprise. With the continued support from State and Federal Government authorities, Parramatta CBD is seeing a continued influx of established multinational tenants.
It seems we cannot go a day with local media commenting on Parramatta’s continued growth, and for good reason. A recent PwC report has identified that the economic growth rate will nearly doubling from 2.4% to 4.6% by 2021. This will mean an additional 22,000 jobs and a CBD one third bigger than it is today, per Parramatta 2021: Unlocking the potential of a new economy from October 2016.
Although we are seeing record growth and demand for commercial space continue to rise, Parramatta is experiencing some of the lowest vacancy rates in Australia – falling well below the 10-year average of 4.3 per cent. Over the last six months, Parramatta experienced the highest half-year absorption in three years, as proven with tenant demand. Mirroring this, average rents in the market have climbed by $20-$40/sqm since mid-2015.
Following this continued tenant demand, private and institutional landlords are establishing high quality commercial assets. Such mooted developments include 89 George Street, 32 Smith Street, 169 Macquarie Street and 105 Phillip Street, all having commenced securing pre-commitments.
As both Parramatta and Sydney CBD’s vacancy rate continues to decline, tenants are beginning to be pushed to newer developments in surrounding Western Sydney suburbs. This knock-on effect along with Sydney’s housing demand is driving the Greater Western Sydney Commission and Local Council’s to propose new revitalisation projects for cities such as Blacktown and Penrith. One great example of this is with Liverpool and Camden cities. Between 2016 and 2021, 9574 new homes will be developed again pushing the demand for increased local amenity and the growth of the commercial core. Other examples include the suburb of Merrylands with Cumberland Council setting aside $23 million for the upgrade of its city centre.
As State and Federal Planners continue to work toward The Greater Sydney Plan 2056, Western Sydney and Parramatta appear to have confirmed their success following unprecedented growth and creating exciting opportunities not only for landlords but for tenants and their staff.