Building Blocks: North Sydney, Sydney, Australia
Ben Burston, Chief Economist at Knight Frank Australia, explains that the previous CBD office market area on the north side of Sydney Harbour Bridge has reinvented itself to appeal to modern investors
1 minute to read
Why is it up and coming?
North Sydney is primed for expansion and revitalisation, and in coming years will benefit from demand spilling over from the city’s crowded CBD. Game-changing improvements in connectivity via the Sydney Metro – the country’s biggest public transport project – along with improved amenity and new supply, has increased its appeal to occupiers, especially those in the technology, media and telecomms sector, which has accounted for 33% of leasing activity over the past two years.
My favourite bits
North Sydney offers all the benefits of the CBD with more green space, fresher air and less crowding. The city’s iconic sights are within walking distance, as are a number of small parks and reserves, with nearby restaurants at Blues Point Road, Crows Nest and Neutral Bay.
Who’s buying?
Institutional and private capital from Australia, Hong Kong, the UK, Singapore, the US and Canada.
What are prime yields (cap rates) in the area?
Yields have decreased slightly over the past 12 months and are now as low as 5%, putting the yield spread between Sydney CBD and North Sydney at around 45 basis points. Current yield metrics, coupled with the potential for further rental uplift, is proving attractive to a wide range of investors.