Lendlease set to become Sydney office king by 2022

Lendlease set to become Sydney office king by 2022

30 June 2017

Lendlease will overtake Dexus as the largest office owner in Sydney by 2022, predicts the latest Colliers International Radar report.

The report, entitled “Who Will Own the City?” expects an injection of 470,000 square metres of new office space into the Sydney CBD market to lift Lendlease above current market leader, Dexus, and its closest rival Investa.

The projected rankings take into account the completion on several major office projects. These include Leadlease’s Darling Square, due to completion late 2017, and Circular Quay Tower, slated for completion in 2012.

Meanwhile, Investa’s 151 Clarence Street (Barrack Place) is due late 2018 and 60 Martin Place in the first half of 2019.

Dexus will become the third largest office owner after 39 Martin Place is taken offline making way for the Martin Place Metro Station Precinct.

“The Core will remain the most sought after precinct once 60 Martin Place, Wynyard Place, Circular Quay Tower and Quay Quarter Sydney are completed, driving future rental growth.“Sydney CBD’s Core precinct is set to benefit further from an overall repositioning as it takes on 51% of total office development activity over the next 5 years,” notes Kristina Mastrullo, Associate Director of Research at Colliers International

“Over the last twelve months, the Core precinct has outperformed all others with an annual increase in net effective rents of 33.6%.

“As Sydney CBD approaches the next supply cycle, Prime stock is expected to heavily outweigh Secondary at 62% of total office square metres and further analysis shows Premium Grade buildings will have experienced the most growth in the 15 years to 2022, increasing in volume by 13%,” Ms Mastrullo said.

She also predicts that a new office category, “Super Prime,” will be added to the retail market.

“In our view, the ‘Super Prime’ category would encapsulate new generation, large-scale office developments such as the Barangaroo Towers, Quay Quarter Tower, Circular Quay Tower and master-planned precinct developments,” she said.