- One of the last remaining underdeveloped boutique retail and commercial assets in the CBD
- Currently, the area has the lowest vacancy, at 9.9%
- Comes as employees and businesses return to the CBD
A strategic prime landholding in the Sydney CBD has been listed for sale, with offers over $50 million expected.
The 100% freehold interest at 263 George Street represents one of the last remaining significantly underdeveloped boutique retail and commercial trophy assets in the Sydney CBD.
20% rental premium
The news comes as the market remains tight for such assets in the Sydney CBD.
James Aroney, JLL Capital Markets NSW Senior Director, noted that Sydney CBD’s Core Precinct remains the most attractive market for local, interstate and offshore developers given the demand from owner-occupiers and investors.
Currently, the Core has the lowest vacancy rate in the market at 9.9%, attracting a rental premium of 20% compared to other precincts.
“This scarcely available property is one of only four sub 600sqm development sites within Sydney’s Financial Core making it the greatest opportunity to develop a new boutique commercial building capable of catering to the city’s strongest leasing demand,” said Mr Aroney.
Vince Krnahan, Colliers National Director, noted the permissible development is for a 17-level standalone boutique retail and office building offering 4,382 sqm gross floor area, subject to approval.
“Such a development ideally matches the strongest and deepest cohort of leasing demand in Sydney’s CBD, that being for whole floors of less than 500 sqm,” said Mr Kernahan.
“This cohort was the strongest prior to pandemic, but has only deepened since, and tenants are demanding prime quality space with abundant natural light and full floor security.
“There are a handful of similar buildings, albeit all refurbishments, that are attracting gross office rents of between $1,200-$1,450 sqm and a new building at 263 George St has the potential to eclipse these.
“The property’s strategic location and prime frontage onto George Street has been identified by the City of Sydney as an amalgamation site with the neighbouring Met Centre at 60 Margaret Street, creating a separate avenue for redevelopment of the entire block.”
Vince Krnahan, Colliers
Mr Aroney concluded that the Sydney CBD is undergoing significant revitalisation, and the new owners of the site would be in the position to take advantage of the development and transport infrastructure boom.
“The city is busier than it’s been in years, with the Property Council of Australia’s latest Office Occupancy survey revealing that Sydney’s occupancy increased over 125% in March 2022 providing confidence that activity in the CBD will continue to grow.”