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News release


Macquarie Park’s “urban activation” zones are driving a new wave of speculative development in an area traditionally requiring pre-lease commitments

The next major office park in Macquarie Park is set to be built at 66-82 Talavera Road

​SYDNEY, 8 November, 2013 – Macquarie Park’s “urban activation” zones are prompting a new wave of speculative development in the area. The precinct is already well known as Sydney’s third-largest CBD behind central Sydney and Parramatta. Now, the $440m re-development of the Macquarie Centre as the largest regional shopping centre in NSW; new infrastructure including the new M2 access point; and proximity to the railway are all factors driving further demand in the area.

An “urban activation” zone is a term coined to describe a location within close proximity to essential infrastructure, including residential; retail zones; business parks; hotels and transport. “Urban activation” zones support the business districts and increase the appeal of the location. 
According to Jones Lang LaSalle’s Director in Charge – North Sydney, Denys Bizinger, there’s a huge growth spurt happening in Macquarie Park, which could see the area become Sydney’s second CBD before too long.

“The lack of supply of large, contiguous areas of A grade office space has created pent-up demand in Macquarie Park. A recent example of this was Citrix leasing 4,500 sqm at 66 Waterloo Road. There was a lot of competition for the same space from like-minded, locally-based tenants looking for a flight to quality,” said Mr Bizinger.

Mr Bizinger said that traditionally in Macquarie Park, the market has been driven by pre-leases. “There’s been four major pre-leases over the last few years to Canon, Fujitsu, Optus and National Measurement Institute – all of them approximately 10,000 sqm.

“We anticipate that with the current levels of demand, and very low vacancy rates in Macquarie Park, speculative development will commence to provide the office supply required.”

Jones Lang LaSalle’s NSW Head of Sales and Investments – Metropolitan Markets, John Macree, said there has been activity in the residential development sector in Macquarie Park, with several recent projects selling off the plan, including Toga and Meriton. Following on from this Mr Macree expects an upturn in demand for business park development opportunities.
Jones Lang LaSalle’s latest Q3 Research Market Overview for Macquarie Park found leasing enquiry improved in Q3 2013, with an increased number of tenant briefs for large continuous A grade space entering the market. 

The report found that numerous domestic and international funds are actively looking to invest in Macquarie Park, however the lack of assets available to the market has kept transaction volumes down. 

“It’s evident that the enquiry and demand is there for A grade office space in Macquarie Park. Tenants looking for more than 4,000 sqm of office space currently have limited opportunity. If the buildings are built, tenants are keen to commit to them. It’s time for the cranes to appear on the horizon again,” said Mr Bizinger. 

Mr Macree expects the next major office park in Macquarie Park is set to be built at 66-82 Talavera Road. Mr Macree is currently managing the sale of the property with Mr Bizinger.

66-82 Talavera Road is just under four hectares of site area, prominently positioned on the north-east corner of the junction of Alma and Talavera Road, directly across from AMP’s Macquarie Shopping Centre and within easy walking distance of Macquarie University and Macquarie Park Railway Stations. The M2 Motorway runs parallel to Talavera Road, with a new M2 access point into the park recently opened at the end of Herring Road, 200m North West of the property. The property has some existing buildings that offer potential income while development consents are obtained. 

“A site of this size and scale rarely comes to the market, without aggregating multiple sites. There are only three opportunities for this type of site left in Macquarie Park. These are the former Peter Board High school site which was sold recently by Dexus to Masters retail (part of the Woolworths retail group); the former Water Board site in Waterloo Rd owned by the State Government; and the site in Talavera Road that we are selling,” said Mr Macree. 

Mr Macree said the property has huge appeal – mainly from local investors. “We are expecting a high level of interest from non-institutional boutique developers with private equity. These boutique development groups operate with a different agenda to the traditional REITs that are the investor-developers in Macquarie Park. As such, many will take a more speculative approach to development to stay ahead of the demand.”

Mr Macree said this is a more convenient business park opportunity than other sites of its type in the area.

“With a floor space ratio of 1:1 it is easier to maximise the development potential of 66-82 Talavera Road. The outcome is a less complex project that will remain cost competitive and result in a quicker development and construction time frame,” said Mr Macree.

Mr Macree said several recent sales in the area highlight demand in Macquarie Park, including the sale of a 28,000 sqm high-tech industrial facility at 40 Talavera Road for $28.2 million, negotiated by Mr Macree and Bizinger, and the sale of an A grade office building for $72 million at 78 Waterloo Road.

“In addition to new demand, businesses already located in Macquarie Park nearing the end of 10-year leases are likely to want to move to A- grade offices to pursue higher Sustainability ratings, thereby further driving up demand for office space in the area.

“Macquarie Park is on the cusp of a new speculative development cycle due to the urban allure of the area, lack of A grade supply and increasing levels of demand,” concluded Mr Macree.