Parramatta. Vacancy rate 'least volatile'

The Parramatta office vacancy rate has historically been the least volatile of all NSW markets and has held relatively steady over the past few years, according to Knight Frank’s Parramatta Office Market report. The vacancy rate has peaked and with no new supply to enter the market in the short-term, coupled with improving demand the vacancy rate is expected to trend below 8 per cent by mid 2011 and continue on this downward trajectory in 2012. With vacancy in the A-grade segment to remain negligible and no new space coming on line in the short term, face rents will rise and as incentives begin to wind back. The Parramatta office market is returning to its traditional place in the Sydney investment spectrum being a strong yielding market known predominantly for its return characteristics. Although there have only been a handful of sales over the past year, the recent transactions highlight the disparity between what the market will pay for quality buildings with long leases compared with secondary assets with short WALEs and capex requirements, where double digit yields have become the norm, the report said.

Parramatta. Demand for office space

Solid demand for quality office space in Parramatta was not enough to stop office vacancies jumping from 7.3 to 10.1 percent in the six months to January, according to the Property Council of Australia’s latest Office Market Report. However these figures mask healthy demand for A Grade space, suggesting the impact of the financial crisis had yet to bite in Parramatta. “The Parramatta CBD is a tale of two cities: solid demand for quality office space and negative demand for lower grade stock,” said Property Council NSW, executive director, Ken Morrison.

Parramatta. Low-cost office alternative

“With a greater population of white-collar workers in a 15-kilometre radius (of Parramatta) than the Sydney CBD, as well as extremely low comparative rentals, demand for quality office space in Parramatta is only going up,” said Nicholas Hogg, director, of Knight Frank, said in The Sydney Morning Herald. Compared to the Sydney CBD, Parramatta offered extremely affordable quality office accommodation in a highly accessible location. He said large organisations were increasingly seeing the sense in location their workplace in Parramatta, given the proportion of clerical, managerial, sales and professional employees living in close proximity to Parramatta’s CBD.