Inner city office suites are in high demand, with strategic buyers looking to undertake possible residential transformations.
Office suites in some of the Sydney CBD’s most popular pockets are being eyed off by speculators looking to potentially convert the spaces into luxury homes.
Driven by the recent premiums being paid by owner occupiers in the residential space, particularly in Sydney, speculative residential buyers are now turning their eyes towards unutilised commercial spaces for potential conversion. This has been amplified by the Covid-19 pandemic, with flexible working practices and mixed-use environments on the rise.
With limited available residential stock, it’s possible we could see parts of Sydney go the way of other global cities like New York, London and Hong Kong, where there is a greater mixed-use environment. A push for mixed-use assets could inject a new breed of investors to the Sydney CBD and metro strata markets.
Colliers’ Executive of Sydney CBD Sales, Angus Windred, who is selling the Penthouse - Level 12, 60 Park Street in Sydney, said he had recently seen an uptick in speculators inquiring about potential rezoning opportunities on the property.
“Due to the changing dynamics of the commercial landscape, buyers are ushering in a new era to ensure their assets have long-term stability. The ability to combine and/or structure usage as both an office headquarters or residential apartment in one has been seen very favourably by purchasers,” Mr Windred said.
With incredible views of Sydney Harbour, Hyde Park and the eastern suburbs, the 102sqm property could be a prime candidate for rezoning. Currently zoned B8 Metropolitan Centre and with price expectations of over $2.5 million, it features high ceilings, large windows and a contemporary traditional legal style office fit-out consisting of a reception, perimeter offices, kitchen and bathroom facilities.
This isn’t the first campaign Mr Windred has had this type of interest, with similar approaches made for the penthouse level of 309 Pitt Street and various suites within 75 King Street attracting attention due to their fierce heritage nature and bluechip central locations.
There is increased appetite from many buyer classes for office space on the back of the NSW Government’s acquisition of 180 strata suites as part of the new Metro West station, with high levels of activity across all corridors of the CBD. A total of 15,400sqm of strata office space over three buildings with a market value of $300 million was acquired as part of the deal.
Colliers’ National Director for Asia Markets Joseph Lin said the flow-on effect from the acquisition would see heightened competition for the limited stock.
“In recent months, we are seeing astute investors aggressively bidding for quality strata offices and retail shops so that they can be ahead of their upcoming competitors from compulsory acquisition. It signifies another golden age for strata owners to capitalise upon their existing property holdings,” Mr Lin said.
Level 12, 60 Park Street, Sydney is for sale via Expressions of Interest closing on the 18th November, 2021 at 5:00pm.