Metro development to trigger North Sydney supply
North Sydney experienced strong office development in 2020, but the short-term supply pipeline is limited; will Sydney Metro development support the next wave of supply?
North Sydney experienced a strong office development cycle in 2020 with the delivery of three major developments totalling 98,400 square metres. This includes 1 Denison Street (61,000 sqm), the third premium grade building in the North Sydney office market.
However, the short-term supply pipeline is limited with only one project currently under construction – the mixed-use development at 88 Walker Street, comprising 13,000 square metres of office space.
The next wave of supply in the North Sydney market will be supported by the Sydney Metro development. The metro project will enhance the connectivity between North Sydney and the Sydney CBD. The commute from Victoria Cross in North Sydney to Barangaroo in Sydney’s CBD will take only three minutes and the North Sydney to Sydney Central commute will reduce from fourteen minutes to nine minutes. This enhanced connectivity to North Sydney and back will support future demand in the market over the medium to long term.
The first significant development relating to the metro is the Victoria Cross above-station commercial tower. Lendlease received development approval in 3Q20 for the 60,000 square metres (42-storey) building, which will be able to house up to 7,000 office workers. The approval was announced as part of the New South Wales (NSW) Government’s fast-tracked projects, referred to as the ‘Planning System Acceleration Program’. This initiative is designed to support economic growth post COVID-19.
More recently, Stockland has submitted plans for an AUD 500 million tower on Walker Street (75,000 sqm). Stockland has amalgamated three sites (110 Walker Street, 118 Walker Street and 122 Walker Street) totalling 2,300 square metres to build with the asset which will also include a 4,900 square metre podium. The project is in close proximity to the new Victoria Cross metro station (300 meters). There will be a new pedestrian walkway through the ground plane of the tower, which will align with the existing walkway at the recently completed 1 Denison Street. This will be able to connect Stockland’s Walker Street development with the new metro station.
Figure 1: Major Future Developments – North Sydney
In addition, North Sydney Council announced the Ward Street Masterplan in 2019. The Ward Street Precinct is adjacent to the Victoria Cross Metro development. The NSW Government has also approved a new pedestrian portal for Victoria Cross Station to the North of the precinct.
The Ward Street Masterplan aims to make North Sydney Centre a more attractive, sustainable and vibrant place for residents, workers and businesses. The plan includes introduce new office developments to accommodate the forecast commercial demand, improving the connectivity to public space via redeveloping the central plaza as well as the plans of new pedestrians.
The Ward Street Masterplan will introduce significant development to the North Sydney market. JLL is tracking three proposed office projects within the Ward Street Precinct Masterplan. With current plans, they will contribute to an aggregated 145,900 square metre of office space to the North Sydney office market.
North Sydney Council has been implementing a long-term strategy for the evolution of the North Sydney CBD. A key cornerstone of this strategy is increased connectivity across the market via improved walkways and plazas, through new developments such as Victoria Cross and Ward Street. These continued investments in North Sydney such as through the Sydney Metro will support the growth of the office market over the long-term.