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News release

Sydney

Sydney’s ‘second CBD’ Parramatta continues to grow

Recent major leasing deals highlight demand in the area


​SYDNEY, 6 DECEMBER 2014 – Sydney’s ‘second CBD’ Parramatta continues to grow, with the latest leasing deals reinforcing the level of demand in the Greater Western Sydney hub. 

The University of Western Sydney has pre-committed to 27,000 square metres of office space in Parramatta Square at 169 Macquarie Street. KPMG is set to reopen an office in the area after 10 years, taking an initial 940 square metres at 91 Phillip Street with indications that they will look to expand. Raffles College of Design and Commerce is also set to occupy 5,000 square metres at 1 Fitzwilliam Street.

JLL’s Director of Leasing for Parramatta, William Tong, said, “The Parramatta leasing market has remained stable across the third quarter of this year. Demand from the finance and insurance sectors has slowed, however it is balanced by the increase in demand from the education sector and business services.

“The University of Western Sydney’s new campus will be opened in 2017. This signifies the largest pre-commitment in Parramatta since Sydney Water in 2009, who took 23,000 square metres.” 

Mr Tong said the education sector is a major driver of demand in the Parramatta area. “Many more tertiary education providers are seeking to establish campuses in the Parramatta CBD. Business services in the sub-500 square metre market are also currently active, with many seeking expansion space.” 

According to Mr Tong, there are other areas of Sydney which are growing into CBD hubs such as Macquarie Park, however Parramatta remains Sydney’s second CBD. “Parramatta services the population of the entire Greater Western Sydney area for residential, business and education needs.”

Mr Tong said population and infrastructure have contributed to Parramatta’s growth. “Approximately half the population of Sydney lives west of Parramatta. The area’s CBD taps into the entire market, being easily accessible for the Greater West region via car or public transport.

“The area has all of the main transport systems – trains, buses, ferries, the M4 and soon a light rail.  In addition the Westconnex and North West Rail Link connects with Parramatta, making the area extremely significant.

“Parramatta also offers easy access to Badgerys Creek Airport and is one of the best in NSW in terms of infrastructure. There’s plenty of parking for most of the offices. Housing is still affordable, however is likely to rise over the medium to long term as demand for the area continues to grow.” 

According to Mr Tong, another big talking point in Parramatta this year is the city council project, Parramatta Square – a multi-billion dollar, three hectare, mixed-use redevelopment precinct. Stage one of Parramatta Square is expected to be completed in 2017.

“In addition to office and education use, residential activity plays a large part in the growth of Parramatta. Between now and 2020, there will be an additional 8,350 units constructed in Parramatta. 

An additional 50,000 new homes are to be built along Parramatta Road in the coming decades . This will have a multiplying effect across the region. There will be more construction, more activity and more economic growth.”

Mr Tong said any increase in office vacancy is expected to quickly be reversed early next year. “It is expected that a slight increase in prime vacancy rates will be seen in Parramatta as tenants hand back space at 18 Smith Street and 2-12 Macquarie Street. However, we anticipate that this space will be absorbed quickly in early 2015. 

“We expect demand from the education sector and SME business services industry will remain reasonably active until end-December, while demand from larger occupiers in other sectors will be moderate. As a result, we will likely see moderate increases in effective rentals in A-grade and B-grade assets,” concluded Mr Tong.