Parramatta Crane Survey Analysis and Commentary on the Parramatta Development Market November 2017 Parramatta Crane Survey
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Parramatta Crane Survey Analysis and commentary on the Parramatta development market November 2017 Parramatta Crane Survey 2 Analysis and commentary on the Parramatta development market Contents The Report 03 Map 04 Executive summary 06 Summary by sector Residential 12 Office 15 Hotels, cultural, and sporting facilities 17 Transport infrastructure 18 Development profiles Residential 19 Commercial 44 Mixed use 51 Other (Education, Civic, Hotel) 54 Other projects 58 1 Parramatta Crane Survey 2 Analysis and commentary on the Parramatta development market The Report About the Crane Survey This is the inaugural Parramatta Crane Survey produced by our Real Estate team at Deloitte Western Sydney, which focusses on Parramatta CBD. We have followed a similar process to the Deloitte UK Crane Survey which has been running for over 20 years, focussing initially in London and recently extending to regional areas. What? Disclaimer The Report analyses the supply and All statistics and findings are based on demand dynamics of the residential data found at the time of research from a apartment development market in the range of sources and was accurate to the Parramatta Central Business District (CBD). best of our knowledge and belief as at 30 Complete 18% Our research also covers the most current September 2017. Facts and circumstances commercial development activity, as well may have changed since that date. Under construction 26% as other sectors. We have identified a total Where possible, the data included in this of 39 developments across all sectors and report has been verified directly with the DA approved 13% classified them as either ‘Complete’, ‘Under developer or cross-checked against other construction’, ‘DA approved’, or ‘Proposed’. sources and in-house intelligence. Proposed 43% The sectors cover residential, mixed use, commercial and other development project types. Where? 26 Parramatta CBD (predominantly within the Residential postcode of 2150). 6 Commercial 3 When? Mixed use Research on all data is current as at 30 4 September 2017 Other How? Our Real Estate team has obtained data on the development projects primarily from sources such as BCI Australia, ‘My Development Portal’ (City of Parramatta Council), Development and Planning Register (NSW Government), project and/ or developer and architect websites, major news articles, internet forums, and more general desktop research. 3 Parramatta Crane Survey Map of current development activity in the Parramatta CBD 4 Analysis and commentary on the Parramatta development market Legend Type Status Residential Proposed Mixed use DA approved Commercial Under construction Education Complete Civic Hotel 5 Parramatta Crane Survey Executive summary Based on the investment and activity occurring in Parramatta today, we see the emergence of a more complete city in the medium term. The most exciting prospect is that the long term prosperity of Parramatta as a more ‘liveable’ city is being enabled through higher urban amenity. The Parramatta CBD has been evolving the city. Charter Hall completed the most It is anticipated to be completed by 2023. rapidly over the past five years and recent project that now houses the new The second stage of the project has is currently being re-shaped by Western Sydney University (WSU) vertical just been announced and it will connect development across the city that will campus in Parramatta Square. Parramatta to Olympic Park travelling see it become the most exciting place further East parallel to the river before to live and work in Western Sydney Walker Corporation is the primary crossing over at Wentworth Point. In the two years since we published our developer delivering three major office Combined with the existing heavy rail and report ‘Shaping Future Cities: Designing buildings (and potentially a fourth) in bus interchange, as well as the proposed Western Sydney’ we have seen property Parramatta Square that will collectively future Sydney Metro West link, the development activity and infrastructure bring in excess of 20,000 new workers into enhanced transport network will play investment in the Parramatta CBD from the CBD. National Australia Bank (NAB) and a key role in connecting workers to jobs both the private and public sector at a NSW Government have backed Parramatta in the Parramatta CBD. historical high. and will establish new Western Sydney headquarters in two of the buildings An emerging cultural precinct Residential development has slowed in Parramatta Square with pre-lease It has been recently announced that the and shifted towards a premium commitments. Museum of Applied Arts and Sciences offering. We don’t forecast an (MAAS) will be located in the Riverbank imminent development ‘cliff’ Based on the other current office precinct with a site selected. There is The Parramatta CBD has seen the developments proposed across the also planned investment to expand emergence of residential apartment Parramatta CBD, this equates to around the Parramatta Riverside Theatres. The projects of landmark quality and scale not 10,000 workers. This will more than replace reconstruction of the Western Sydney experienced in Parramatta CBD previously. the jobs being transferred by CBA from Stadium situated at the northern fringe Although the residential development Parramatta to Redfern. of the Parramatta CBD will deliver a new market is in a ‘cooling’ phase at the 30,000 capacity stadium. Construction has moment, the private developer market A goal of the Shaping Future Cities project commenced and is set to open in 2019. has taken a long term positive view of was to achieve 200,000 additional jobs Collectively, the cluster of a new museum, Parramatta CBD as a liveable city. While in Western Sydney by 2020, and the expanded theatre and new stadium many projects have been planned and Parramatta Square development goes centred around an active café strip along there is a strong pipeline of development, towards fulfilling this objective. Church street (Eat Street) and connected these will most likely only be delivered with a new light rail will create an exciting following strong pre-sales. Continued investment in cultural and sporting destination for infrastructure led by light rail Parramatta. Parramatta Square – catalyst for Complimenting current property commercial development development by the private sector is City of Parramatta Council enabled investment by the NSW Government in construction to commence on the transport and cultural infrastructure. Stage Parramatta Square redevelopment in 2015 1 of The Parramatta Light Rail (PLR) project which has been 20 years in the making and will commence construction in 2018 and will deliver a new CBD employment core to will span from Westmead to Carlingford. 6 Analysis and commentary on the Parramatta development market Despite adverse market commentary, we don’t see a significant oversupply risk eventuating and settlement risk is being actively managed by developers, with no major issues so far. Residential Office Residential development in Parramatta New office development in the Parramatta Hotel CBD is adjusting to the changing property CBD is occurring at unprecedented levels, A gap in the Parramatta CBD market for market conditions. Despite adverse driven by Walker Corporation who are short stay accommodation has been market commentary, we don’t see a undertaking the development of multiple recognised by various operators. Recently significant oversupply risk eventuating and office buildings in Parramatta Square that we saw a major redevelopment of the settlement risk is being actively managed will become the commercial and civic heart Parkroyal hotel which has long enjoyed its by developers, with no major issues so far. of Parramatta CBD once completed. position as the leading Parramatta CBD hotel. • The volume of apartments under A total of 92,000 sqm of office floor space construction in the Parramatta CBD is currently under construction across By 2020 some 857 new rooms will have is slowing. A total of 2,707 apartments two projects being developed by Walker been built across four projects. All of these across seven projects are currently Corporation and Dexus. In the latest office will be able to service local and regional under construction in the Parramatta market report from the Property Council of businesses as well as being in walking CBD and due for completion between Australia, for the first six months of 2017, distance of the new museum location, 2018 to 2019. In contrast, the current DA there was a zero vacancy rate for A-Grade Riverside theatre and Western approved total is 1,110 apartments across office space in Parramatta, which has Sydney Stadium. four projects. historically been in short supply. • Parramatta CBD has a short term These hotel projects will service not potential pipeline of DA approved The office market rents that have been just the local Parramatta market but will apartments equivalent to two to three struck in the two new buildings on accommodate visitors to the Westmead years supply based on recent trends. Parramatta Square (designated as ‘3PS’ and health precinct, events at Olympic Park and The medium/long term potential supply ‘4PS’) are setting new benchmarks. the rest of Western Sydney as well as being is significantly larger (in excess of overflow capacity for the Sydney CBD. nine years) and includes a number of Demand from all of which will be boosted ambitious projects which have not yet We invite you to read the by the proposed PLR. been brought to market. Parramatta Crane Survey • We believe a number of these proposed projects may not eventuate and note that and gain some insights into already two major proposed residential the residential apartment developments are being repurposed to commercial use, as a result of more and office development attractive short-term returns. sectors in the Parramatta David Hagger • Presale apartment purchaser settlement CBD market. Real Estate Leader risk remains a live issue for developers Deloitte Western Sydney and their project financiers but no significant issues have been identified and we see this being closely monitored by developers.