5 Feb 2011: Investa Property Group is forecasting strong rental growth and tightening yields for the improving North Sydney office leasing market in 2011, with rental vacancy rates set to fall by up to 0.52% in the year to December 2011.
In line with these improving market conditions, Investa’s recently refurbished 146 Arthur Street North Sydney experienced recent strong rental activity with over 47% of the building area (3,823m²) having been leased in the last six months.
This activity has seen the occupancy level increase to over 87% and demonstrates strong tenant demand in the improving North Sydney market.
Fund Manager of ICPF Peter Menegazzo commented: “The significant interest we have in 146 Arthur Street confirms our resolve that 2011 will be a strong year for North Sydney and the commercial leasing market in general. A grade office space is increasingly being snapped up as the leasing market improves.
”Mr Menegazzo continued: “The most pleasing trend is that existing vacant areas are seeing strong levels of inquiry and competition emerging for those areas.”
The building has views to the harbour with whole or part floors for lease as well as rooftop signage rights. The property is being marketed by Frank Sassine of Colliers International and Marcus Pratley of Richardson and Wrench North Sydney
.“Positive signs are emerging for the North Sydney office leasing market, with a significant increase in demand levels, particularly in the A grade sector,” said joint leasing agent Marcus Pratley of Richardson and Wrench North Sydney.
Pete Carstairs Research Manager at Investa Property Groupcommented: “Sydney CBD and North Sydney rents have historically been strongly linked. If Sydney CBD tenant demand continues to recover next year at the strong levels seen following other cyclical downturns, and on the back of anticipated Sydney CBD absorption of over 100,000 sqm in CY 2010, this downward pressure on vacancy will have a positive impact on both North Sydney and Sydney CBD rents.
In North Sydney we see demand continuing to improve during CY11, leading to incentives gradually being wound back from around 25-30% currently on offer. This will result in effective rental growth of North Sydney office space during 2011. If vacancy rates continue to decline, face rental growth should begin to emerge, as it has done historically when vacancy trends below 11 per cent,” said Mr Carstairs.
Funds managed by Investa currently own five buildings in North Sydney totaling more than 72,200 square metres of net lettable area, including the multi-award winning ARK development at 40 Mount Street and 146 Arthur Street, North Sydney.
During 2010 Investa has leased approximately 25,000 square metres of office space in North Sydney.