Rail projects to stoke Sydney commercial market
Sydney’s three major rail projects will have the biggest impact of any infrastructure projects on the state’s property markets over the next six years, according to a report by JLL.
Sydney’s Light Rail (CBD and South East), Sydney Metro Northwest and Sydney Metro City and South West would have the biggest effect on both residential and commercial sectors, according to JLL’s NSW economic growth drivers and infrastructure report.
JLL’s head of research Andrew Ballantyne says the rail routes will see travel times and costs reduced, connect people with job opportunities and products with markets, and affect the value of residential and commercial property near stations along the way.
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The report notes that infrastructure spending in NSW was at unprecedented levels, with the state government committed to delivering 10 key projects in metro and regional areas by 2024.
Strong population growth and under-investment in significant infrastructure projects following the 2000 Olympic Games provided the current catalyst to improve services and facilities across the state, JLL says.
Properties close to Sydney’s Light Rail were likely to increase in value, while the mix of retailers and office tenants along the route was also expected to change.
JLL’s NSW managing director Daniel Kernaghan says George St in the CBD will become a more desirable location for retailers in the luxury and food-and-beverage categories. “Improved connectivity within the CBD will mean organisations can look beyond the core CBD to secure lower office rental rates. Average A-grade rents on Goulburn Street are 31% lower than for comparable A-grade core CBD assets,” he says.
The Sydney Metro would also see Central Station revitalised, helping to regenerate the southern Sydney CBD.
Meanwhile the Greater Sydney Commission’s three-metropolis proposal would create opportunities for investors, developers and occupiers, JLL says.
The Western Sydney Airport and Badgerys Creek Aerotropolis would fuel growth in the western region of Sydney, the reported notes.
“In Parramatta, the capital of the Central River City, the office market is expected to reach 1 million square metres of space by 2022 and 1.14 million by 2027,” Kernaghan says.
“Organisations are exploring real estate strategies to help attract and retain talented staff as employees consider their location options to achieve a better work-life balance.”
The report also notes the potential economic risks include both overseas and interstate migration patterns and the high level of household debt.
It says that about 70% of NSW’s population growth since 2000 is due to net overseas migration.
The spike in Sydney home prices — rising 75% between 2011 and 2018 — could be a catalyst for increased interstate migration, it says.
This article originally appeared on www.theaustralian.com.au/property.
