Active Super has taken the opportunity to acquire and consolidate a neighbouring parcel of land being sold by Ausgrid in North Sydney at 70 Berry Street.
The 966sqm former substation site was picked up by the super fund (formerly known as Local Government Super) for $25m.
The Fund owns the existing 76 Berry Street and the consolidated 3,550sqm site will provide an opportunity for the development of a 37 storey premium office tower of 66,000sqm in future years.
The site sits within the Ward Street precinct of North Sydney which the Council is seeking to revitalise following a new Master Plan to take advantage of the new Metro station being delivered to the area in 2025.
The sales process was managed by JLL’s agent Mitch Noonan and Harry Sullivan.
There have been few sales in North Sydney this year with a number of smaller development sites on the Pacific Highway sold in earlier 2021. In December 2020, Charter Hall sold 65 Berry Street to Intera Group for $211m, whilst this week, EG Funds Management announced the acquisition of 32 Walker Street North Sydney for approx $109m.
Following a decade of limited new developments, three major developments completed in 2020 have provided the largest volume of new supply to North Sydney on record with an extra 98,026sqm, taking the total office stock to 922,793sqm. In a sign of confidence for the market, agents have indicated that there are over 12,000sqm of lease deals agreed across 1 Denison Street, 118 Mount Street and 100 Arthur Street currently in progress with the flight to quality trend to newer towers along with a greater emphasis on amenity in the workplace being key drivers of demand. Offsetting this however is a number of major relocations out of the market including NAB who are vacating 29,000sqm at 105 Miller Street and relocating to Parramatta Square; Goodman Fielder (4,000sqm) who have relocated to Macquarie Park; and U Bank (3,000sqm) and NSW Health (2,000sqm) both vacating their tenancies in North Sydney.
Knight Frank have reported that while average gross face basis, rents are unchanged in January 2021, measuring $972/sqm ($829/sqm net face), rising incentives have put downward pressure on effective rents with prime incentives rising to 30.2% as at January 2021, up from 21.3% in January 2020.
There are a number of major new developments expected to be delivered into the market in the coming years. Billbergia are currently developing 88 Walker Street which will seek to capitalise on the flight to quality for smaller tenants in the market. Lendlease received development approval in 3Q20 for the 60,000 square metres (42-storey) building whilst Stockland have also lodged plans for the development of 75,000sqm of space at 110 Walker Street.
The Ward Street Master Plan document is below.
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