Norwest announces final stage.
May 10, 2008 // IBM BLOG POST
The developer FKP has begun the final stage of its Norwest Business Park joint venture called Circa, which will encompass 300,000 square metres of commercial, retail, leisure and community space. The deal will lead to the development of most of the site’s 377 hectares. When finished it will be nearly half the size of the Parramatta business district. It will also be one of the largest suburban developments in Sydney’s north-west, rivalling those at the neighbouring Rhodes and Macquarie Park. Already a large portion of Sydney’s workforce is stationed in these new areas. And as more companies gravitate to the campus-style office and business park areas, rents and occupancies are rising.
The chief executive of FKP, Peter Brown, who is also chairman of the Mulpha-FKP joint venture, said Circa would represent a significant opportunity for businesses in Sydney. ”Trying to reverse-engineer lifestyle-friendly workplaces represents a challenge for many companies, so the opportunity to base a corporate identity in a purpose-built environment like Circa is unique.” Mr Brown said the first stage of Circa would be a retail centre of about 5200 square metres, including a supermarket and 25 specialty stores. This would be followed by 10,600 square metres of office space over three levels.
Not far away is Macquarie Park, where an additional 450,000 square metres of office space could be added over the next five years as developers capitalise on the expected completion later this year of the Epping-Chatswood rail link. This would supply an average of about 90,000 square metres of new office space each year – about 50,000 square metres above the five-year historical average – research from CB Richard Ellis indicates.
The wild card for Macquarie Park will be the impact of the current global credit squeeze. ”As with most markets at present, supply in Macquarie Park hinges on the availability of credit for development,” a senior director at CBRE, Tom Bartlett, said. “Some of the mooted supply may be affected as developers scramble to raise funds. Precommitments will also be crucial for new developments to avoid any blow-out in vacancy rates.” The Sydney office MarketView report forecasts that the Macquarie Park vacancy rate is likely to rise from its present 7.2 per cent over the next four years, with supply set to increase substantially as a number of new developments come on stream.
However, a research analyst at CB Richard Ellis, Luke Nixon, forecast that the suburb’s vacancy rates are likely to fall back below 10 per cent by 2013. Expected strong net absorption will help drive the Macquarie Park market, with take-up set to average nearly 77,500 square metres annually over the next five years, compared with the five-year historical average of 46,000 square metres. CBRE Research & Consulting is forecasting that A-grade net face rents in Macquarie Park will grow by 12.2 per cent by 2013. B-grade rents are expected to achieve slightly higher rental levels in 2013.
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