Sydney’s CBD left behind as Parramatta and Newcastle punch above their weight
Parramatta has absorbed over 20,000 sqm of office space in the past year.
As Sydney’s CBD performance continues to slide due to businesses packing up or reducing the amount of space they need, other parts of NSW have gathered momentum.
A recent report from The Property Council of Australia looked at the changing CBD and non-CBD office markets across the country and measured their performance in the wake of the pandemic.
The report found that a number of office locations were unable to fully recover, leaving other suburbs in the country to take up stock and absorb businesses moving in.
Parramatta’s CBD is out performing Sydney’s office market.
Both Sydney and Melbourne’s CBD recorded with increases in vacancy to 11.3 per cent and 13.8 per cent respectively, over the past year.
Meanwhile, markets such as Parramatta and Newcastle have outperformed the major cities – with high rates of demand to occupy space.
Ray White’s commercial head of research Vanessa Rader said Parramatta’s office market had continued to grow with high quality A-grade assets being added to the market and stock nearing a million square metres.
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Sydney’s CBD was left empty during the pandemic as governments enacted lockdown laws. (AAP Image/Dean Lewins) NO ARCHIVING
“The report measured the office markets using annual net absorption to market size. This means that the Parramatta market has seen a 2.14 per cent growth in the number of businesses occupying space in the 900,000 sqm+ area.
“The data suggests that an extra 20,000 sqm of office space has been occupied in the area. Parramatta is a smaller market than Sydney’s CBD, which has declined by 13,000 sqm. Both it and Newcastle experienced an uptake in the pandemic as businesses moved away from the city into regional areas.
While retail spending has somewhat recovered since the pandemic, office workers are still opting to work from home two or three days a week. Picture: NCA NewsWire / Christian Gilles
“Data suggests that workers are only coming into the office a few times a week, with noticeable dips in transport usage on Mondays and Fridays. Workers have also been more vocal in wanting spaces with larger meeting rooms or amenities such as gyms or cafes, so the businesses have to move to accommodate their needs.”
Ms Rader said Parramatta also enjoyed a geographic advantage as it is situated in the centre of Sydney surrounded by transport and new constructions in the business, finance and insurance industries.
Parramatta is Sydney’s largest non-CBD market, with total stock nearing one million square metres.
Newcastle also reported positive results, with the location providing more affordable spaces for commercial businesses in the small office market.
Despite having difficulty in attracting larger businesses, Wollongong had also benefited from population movements in addition to new supply added during the course of 2022.
“I think the return of immigrant workers, particularly those in skilled industries, will drive a greater movement back to the office in the coming months.
“If forecasts of a 5 per cent unemployment rate hold true, this will also drive workers to return to the office in an effort to keep their jobs.”
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