Achieving A-Grade Office Space in the Parramatta Cbd Economic Review
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ACHIEVING A-GRADE OFFICE SPACE IN THE PARRAMATTA CBD ECONOMIC REVIEW 13 SEPTEMBER 2019 FINAL PREPARED FOR CITY OF PARRAMATTA URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE: Director Clinton Ostwald Associate Director Alex Stuart Research Analyst Anthony Wan Project Code P0009416 Report Number Final © Urbis Pty Ltd ABN 50 105 256 228 All Rights Reserved. No material may be reproduced without prior permission. You must read the important disclaimer appearing within the body of this report. urbis.com.au CONTENTS TABLE OF CONTENTS Executive Summary ............................................................................................................................................. i Introduction ........................................................................................................................................................ 1 1. Planning Context................................................................................................................................... 3 1.1. A Metropolis of Three Cities ................................................................................................................. 3 1.2. Current Parramatta City Centre Planning Controls .............................................................................. 5 1.3. Draft Auto Alley Planning Framework (2014) ....................................................................................... 9 1.4. Parramatta City Centre Planning Framework Study (2014) ............................................................... 10 1.5. Parramatta CBD Planning Strategy (2015) ........................................................................................ 11 2. Parramatta CBD Office Market ........................................................................................................... 14 2.1. Office Building Classification .............................................................................................................. 14 2.2. Parramatta CBD .................................................................................................................................. 15 2.3. Existing Supply ................................................................................................................................... 17 2.4. Vacancy Level by Grade ..................................................................................................................... 20 2.5. Historic Net Absorption by Grade ....................................................................................................... 20 2.6. Rental Cost ......................................................................................................................................... 21 2.7. Proposed New Development .............................................................................................................. 22 2.8. Residential Market .............................................................................................................................. 25 3. Competitive Commercial Locations .................................................................................................... 26 3.1. Sydney CBD ....................................................................................................................................... 27 3.2. North Sydney ...................................................................................................................................... 29 3.3. North Ryde/ Macquarie Park .............................................................................................................. 31 3.4. Chatswood .......................................................................................................................................... 33 3.5. Brisbane CBD ..................................................................................................................................... 35 3.6. Implications for Parramatta ................................................................................................................. 37 4. Drivers of Office Tenant Demand ....................................................................................................... 38 5. Parramatta CBD Resident & Worker Profile ....................................................................................... 44 5.1. Resident Profile ................................................................................................................................... 44 5.1.1. Historical and Forecast Population Growth ........................................................................................ 44 5.1.2. Age Distribution ................................................................................................................................... 45 5.1.3. Incomes .............................................................................................................................................. 46 5.1.4. Industry of Employment ...................................................................................................................... 47 5.2. Employee Profile ................................................................................................................................. 47 5.2.1. Industry of Employment ...................................................................................................................... 48 5.2.2. Place of Residence / Journey to Work................................................................................................ 48 6. Parramatta CBD Office Demand Forecasts ....................................................................................... 50 6.1. Employment Projections ..................................................................................................................... 50 6.2. Office Demand Forecasts ................................................................................................................... 52 7. Consultation ........................................................................................................................................ 54 8. Mixed Use Case Studies .................................................................................................................... 56 8.1. Case Studies ....................................................................................................................................... 56 8.2. Implications for Parramatta ................................................................................................................. 71 9. Constraints and Opportunities ............................................................................................................ 72 9.1. Constraints Analysis ........................................................................................................................... 72 9.1.1. Parcel Size .......................................................................................................................................... 72 9.1.2. Proximity to Train Stations .................................................................................................................. 74 9.1.3. Residential Design .............................................................................................................................. 76 URBIS PARRAMATTA A-GRADE OFFICE ASSESSMENT 2019 UPDATE FINAL 9.1.4. Heritage .............................................................................................................................................. 77 9.1.5. Fragmented Ownership and Strata Titling .......................................................................................... 79 9.1.6. FSR Capacity ...................................................................................................................................... 81 9.1.7. Development Costs............................................................................................................................. 85 9.2. Planning Options to Influence Office Supply ...................................................................................... 85 9.2.1. Minimum Office FSR ........................................................................................................................... 85 9.2.2. Transferable Development Rights ...................................................................................................... 85 9.2.3. Residential Development Cap ............................................................................................................ 86 9.2.4. Residential Design Code .................................................................................................................... 86 10. Conclusions and Recommendations .................................................................................................. 87 10.1. Summary of Key Issues ...................................................................................................................... 87 10.2. Recommendations .............................................................................................................................. 88 Disclaimer ........................................................................................................................................................ 95 Appendix A Consultation Findings URBIS PARRAMATTA A-GRADE OFFICE ASSESSMENT 2019 UPDATE FINAL CONTENTS EXECUTIVE SUMMARY PURPOSE OF THE STUDY Growing the Parramatta CBD