'DEATH' OF MARTIN PLACE GREATLY EXAGGERATED
Written on the 2 September 2015
SYDNEY'S Martin Place office precinct has turned a corner, with the area's potential stock of vacant space sliding by about 70 per cent in a little over a year, according to new research.
The exit of Commonwealth Bank, ANZ, Westpac and law firm Freehills in early 2014 sparked concerns over the future of what was considered one of the city's most sought-after office precincts.
The problem was compounded by the prospect of upcoming vacancies in No.1 Martin Place and the MLC Centre in addition to new developments at 20 Martin Place and 5 Martin Place.
However, a series of lease commitments this year has shifted the balance, according to CBRE which estimates that about 100,000sqm of potential vacant space created in 2014 has been reduced to about 30,000sqm.
"Despite early concerns, what Martin Place has provided is opportunity," says Chris Fisher, CBRE's director of office services.
"The major banks have been replaced by a diverse range of industry sectors ranging from banking and legal to architects and IT firms, with strong interest in the remaining 30,000sqm of available Martin Place office stock."
Fisher cites No.1 Martin Place as a prime example of the shifting tenancy profile of Martin Place, with the building having attracted commitments from APRA, Charter Hall, DLA Piper, LinkedIn and Macquarie Bank.
This had reduced a possible 30,000sqm vacancy in 2014 to one of just 4892sqm, which comprises three office floors.
The MLC Centre has been a strong performer, with a potential vacancy of 30,000sqm cut to about 8000sqm with only five whole floors available for lease.
"Tech companies in particular have embraced the Martin Place precinct, as highlighted by commitments from Atlassian, Linked-In and Apple," Fisher says.
He sees the take-up as good news for the new developments at 20 Martin Place and 5 Martin Place, which were coming on line this year.
"Commitments from Challenger and Ashurst have anchored 5 Martin Place, with over 75 per cent committed prior to practical completion.
"The speculatively developed 20 Martin Place has secured Apple and is attracting strong interest, with over 50 per cent committed prior to practical completion."
Fisher says the activity delivers confidence for new projects, with the proposed development at 60 Martin Place gaining momentum.