This article is from the Australian Property Journal archive
THE NSW government has approved Scentre Group’s $500 million proposal to build a 105,000 sqm office tower, which is set to become the third tallest building in Parramatta as sub-regional shopping centres enjoy a revival during the pandemic.
The development approval is a culmination of seven years of planning.
Plans were first drawn up in 2014 to develop a 25-storey office building providing 35,000 sqm. In August 2018 they were revised for a 42-storey tower comprising 112,000 sqm office.
Yesterday Planning Minister Rob Stokes approved plans for a $670 million, 47-level, 105,000 sqm, 165 metre office tower on the corner of Argyle and Marsden streets.
“Parramatta’s status as Sydney’s second CBD will be further enhanced by this development,” Stokes said.
“It will bring jobs to Sydney’s west and capitalise on city-shaping projects like Parramatta Light Rail and Sydney Metro West.
“As Minister for Planning, it is my goal to ensure we have the right development in the right place at the right time, and this proposal does that.” Stokes said.
Scentre’s tower will be the third tallest building in Parramatta behind Walker Corporation’s Parramatta Square and 2 O’Connell St.
The approval comes as more companies seek workplaces outside of CBDs as more workers want to work closer to home, which has resulted in an increase in demand for retail in convenience and subregional centres.
This trend has not gone unnoticed with investors pouring money into the asset class.
According to Real Capital Analytics latest data, sub-regional centre transactions has surged to almost $1 billion in 2021 – more than double the three and five-year averages.
RCA’s head of analytics Pacific Benjamin Martin Henry said 2021 represents the best start to a year for the sub-regional asset class since 2015. The average sale price rose to $105 million from the previous high of $88 million.
“Larger properties, such as sub regional shopping centres, are also exhibiting yield compression, albeit only slight. Still, this is a welcome improvement for a subsector that has struggled in recent years.” Martin Henry said.
Westfield Parramatta currently caters to a trade area population in excess of 1 million residents, with a total accessible market of 2.4 million residents.
The centre is anchored by David Jones, Myer, Kmart, Target, Coles and Woolworths. There is an Event Cinemas complex on site and approximately 440 specialty stores as well as international mini-majors Uniqlo and Zara.
The total retail spend by the Westfield Parramatta Total Trade Area was estimated at $13.5 billion in 2020 while the total retail spend by the Main Trade Area was estimated at $5.0 billion.
