This article is from the Australian Property Journal archive
NORTH Sydney is consolidating its status as a tech, media and telecom hub, with companies in the sectors taking up more than 41,000 sqm of office space in the CBD fringe market during this quarter.
Heavy hitters such as Nine Network and Microsoft are moving into North Sydney from outside the market, which JLL’s head of northern Sydney office leasing, Paul Lynch said bodes positively for future groups to relocate to the market.
According to JLL, progressively since 2016 there has been a number of tech and media companies pre-commit to new and refurbished developments in the North Sydney office market, totalling 88,400 sqm in that period.
Among the pre-commitments have been Nine Network over 25,000 sqm at Winten’s $1.2 billion 1 Denison St, while tech giant Microsoft took 10,655 sqm in the same building. They will be joined by SAP across more than 5,700 sqm.
At Dexus’s 100 Mount St, NBN moved into 20,358 sqm, NextGen.Net took 2,563 sqm and Citrix Systems 1,241 sqm.
Vodafone has moved into 12,000 sqm at 177 Pacific Hwy, and Cisco into 4,000 sqm in the same building, while oOh!Media moved into 6,858 sqm in 73 Miller St.
Combined with occupiers re-examining their space location and requirements due to COVID-19, moves to decentralise from the CBD into geographic locations closer to where workers live could result in the North Sydney becoming an extension of the Sydney CBD market, JLL believes.
JLL’s NSW head of office leasing, Dan Kernaghan said a potential impact resulting from the COVID-19 environment is for companies to consider alternative office models such as a hybrid approach of a hub and spoke model.
“This hub and spoke model could be likened to an urban and suburban office solution, where a hub office is located in CBD areas and a spoke office is located in suburban areas, closer to where the employees live.”
Kernaghan said this trend of occupiers splitting their operations was started in Sydney by the NSW government and large corporates a few years ago. The government began moving a number of government agencies to Parramatta Square early this year as Westpac leased 10,000 sqm within the development, Herbert Smith Freehills moved part of their workforce to Macquarie Park in 2018, and Allianz moved their IT teams to North Sydney.
“While we haven’t seen any recent moves to suggest that the hub and spoke trend has gained momentum, we do expect it to continue over the medium term and could see an acceleration due to companies considering their current locations, due to COVID-19,” Kernaghan said.
