NORTH Sydney's tight office market is about receive a big injection after Investa gained development approval from the North Sydney City Council to build a new $250 million office tower.
Located at 40 Mount Street, the 21 level building named ‘Ark’ is due for completion in 2010 and will provide in excess of 28,500 sqm of prime grade commercial office space with expansive harbour and city views from floor-to-ceiling windows. The building will also contain large efficient floor plates of up to 2000 sqm.
There are currently no pre-commitments for the building, but Investa Commercial Developments’ group executive Richard Johnston said ICD is currently in discussions with a number of prospective tenants to secure pre-commitments for the building.
He added that the project coincides with the strengthening North Sydney office market as rental vacancies tighten in Sydney’s CBD.
According to BIS Shrapnel’s 2007 Sydney Commercial Property Prospects Report, Sydney CBD prime grade net effective office rents are forecast to grow 13% and 15% respectively over the next two years. North Sydney prime grade net effective office rents are forecast to grow 13% and 22% over the same period of time.
“With property forecasters expecting strong rental growth in the next two to four years and a lack of new supply in Sydney’s CBD, the North Sydney market will become an attractive alternative for tenants seeking large contiguous prime grade office space.
“North Sydney is Australia’s largest non-CBD office centre and contains approximately 800,000 sqm of office space. According to property researcher Jones Lang Lasalle, ‘Ark’ is the only project proposed to come on stream in 2010,” Johnston said.
Ark will sit on a 2,467 sqm site, which was acquired by ICD in July last year for $23.85 million. the site is adjacent to the North Sydney Post Office and in close proximity to the North Sydney Railway Station. In order to boost North Sydney’s appeal as a commercial centre, a number of initiatives are being undertaken, including an upgrade to the train station.
Ark has also targeted a 5 star ABGR and 5 star Green Star. ICD’s general manager Michael Lochtenberg said his team is focused on developing buildings that inspire businesses and set new standards in environmental performance.
“Green credentials are becoming increasingly important to Australian businesses, however there are few buildings in Sydney, and particularly in North Sydney that offer larger tenants superior environmental performance combined with large efficient floor plates and prime-grade building services.” Lochtenberg said.
Johnston said the development provides ICD with the opportunity to leverage the skills across Investa’s other businesses and to create a product for Investa’s internal or external funds management business upon completion.
The property also provides further leverage into the North Sydney office market. Investa owns and/or manages buildings in North Sydney at 146 Arthur Street, 80 Pacific Highway, 73 Miller Street and 54 Miller Street. The total net lettable area of these is 43,793 sqm with a total value of $227.95 million.
Australian Property Journal
