The rise of Parramatta
Geographically positioned right in the middle of metropolitan Sydney, Parramatta continues to emerge as the second CBD, with commercial space offerings tight and working in favour of landlords and not tenants. It is in this type of market, that independent tenant reps provide the ultimate advocacy solution for those faced with the increasing power of landlords.
The SMH reported total sales of $666 million in 2014, indicating strong investment in the area. Parramatta was deemed the star of Australian commercial property by the Financial Review in 2015, with a total return of 16.3%. The significance of the precinct has further strengthened with the relocation of several State government offices from the Sydney CBD to Parramatta.
Taking the focus from the Sydney CBD gives the growing population of Western Sydney greater professional and lifestyle opportunities in a convenient location.
However, the Parramatta commercial market is currently very tightly held, with the AFR reporting a 5.6% vacancy rate, the lowest commercial tenancy rate in 20 years. A perfect scenario for Parramatta Landlords with the average A Grade net rent up 7%.
Despite several new commercial developments in progress, it is not expected this competitive environment will ease in the future as much of this space is pre-committed. The move west by the Department of Education has taken up 25,000 sqm, provided by Dexus at 1O5 Phillip Street.
From a tenant’s perspective, this means renewing or breaking into the Parramatta market both difficult and competitive, with landlords offering less incentives and higher rents.
The benefits of tenant advocacy are obvious in this market where strong negotiation is clearly needed. It is still common, however, for landlords to offer some form of incentive, meaning independent tenant reps can fight harder for greater savings.
Expertise within TRS indicates that despite the tightening market there is still office space available in Parramatta, particularly as new developments provide some medium-term relief. This current market circumstances in Parramatta means that tenant representation services are more important than ever.
Engaging the only independent tenant reps TRS in the market, will ensure that an expert with extensive market knowledge of Parramatta will negotiate at a more competitive level.