Office Sydney CBD Leasing Development Tracker Here to guide you Sydney CBD Development Tracker Q3 2016 Introduction The balance shifts... Australian economic growth is shifting from mining These dynamics will see the balance of power shifting and construction to the more employment intensive towards landlords when it comes to lease negotiations over service sector, which has been the largest contributor to the next few years. employment growth last year. The NSW Government is seeking vacant possession of all As at February 2016, service employment growth reached Sydney Metro sites by Q1 2017. Similarly, Wanda, the owner 3.9% year on year on a rolling-annual basis, surpassing of the Goldfields House residential development site, has the ten-year moving average of 2.7% pa. This strong commenced serving notices to achieve vacant possession employment growth in the service sector has been driving by Q1 2017. improved tenant demand in the service-oriented capital This will add significantly to the already buoyant office cites of Australia, with Sydney being at the forefront of this demand in the CBD through the balance of 2016, and transition. coupled with negative net supply in coming years, will create In the twelve months to January 2016, the Sydney CBD conditions conducive to significant effective rental growth. office market recorded a net absorption of 157,150 sqm, the strongest level since 2007. Tenant activity has been underpinned by the finance and banking sectors, as well as a cohort of IT companies and co-working start-ups taking up on premium space in the CBD. Whilst demand continues to build momentum, the net supply over the next four years is expected to decline substantially due to the significant withdrawal of stock for residential conversion and the construction of the new John Preece Sydney Metro stations. Our estimates indicate that up Head of Office Agency, NSW & Australia to 362,000 sqm of office space will be withdrawn from Knight Frank Australia Pty Ltd the market permanently over the next four years, with the majority of these withdrawals occurring in 2017 and 2018. July 2016 This will result in significant tenant displacement and put further pressure on an already tight market. 3 4 23 26 11 20 1 6 27 29 32 8 7 31 30 1 24 25 28 3 13 THE ROYAL 5 21 10 2 BOTANIC 17 18 GARDEN 9 15 12 33 16 22 14 19 4 Barangaroo T2 - 88,200 sqm (St George / BT / Westpac / Gilbert 388 George Street - 36,151 sqm 1 + Tobin) 18 Investa / Brookfield - Q4 2018 - 0% committed LLITST - Q3 2015 - 89% committed 20 Martin Place - 15,920 sqm (Apple / Regus / Hogan Lovett / Darling Square, The Haymarket - 20,000 sqm (CBA) 2 McGrathNicol) 19 Lendlease - 2018 - 100% committed Pembroke Real Estate - Q3 2015 - 75% committed 3 80 Pitt Street - 11,400 sqm 20 259 George Street (ex-Suncorp 20,352 sqm) - 44,954 sqm Yorkban - Q1 2017 - 0% committed Memocorp - 2018 - 55% committed 4 Barangaroo T3 - 79,221 sqm (KPMG / Lendlease) 21 60 Martin Place - 40,000 sqm LLITST - Q2 2017 - 76% committed Investa / Gwynvill Group - H2 2019 - 0% committed 5 333 George Street - 12,500 sqm (Clyde & Co) 22 The Ribbon, 1 Wheat Road - 38,000 sqm Charter Hall - Q4 2016 - 0% committed Grocon / SHFA - 2019+ - 0% committed 6 200 George Street - 38,676 sqm (Ernst & Young / Mirvac) 23 Barangaroo C2 & C8 - 11,000 sqm - LLOneITST - 2019+ - Mirvac / AMP - Q3 2016 - 100% committed 0% committed 7 Barangaroo T1 - 101,729 sqm (PWC / HSBC / Marsh Mercer) 24 33 Bligh Street - 26,000 sqm LLOneITST - Q4 2016 - 48% committed Energy Australia / Investa - 2020+ - 0% committed 8 Grosvenor Place, 225 George Street (ex-Ashurst) - 85,515 sqm 25 275 George Street - 7,000 sqm DEXUS / CIC / CSC - H1 2016 - 83% committed LaSalle Investment Management - 2019+ One Wharf Lane, 161 Sussex Street - 6,500 sqm 26 CQ Tower, 182 George & 33 Pit Streets - 55,000 sqm 9 M&L Hospitality - Q3 2016 - 0% committed Lendlease - 2020+ 10 Shelley Street (ex-KPMG) 27,778 sqm (Suncorp) 27 55 Pitt Street - 30,000 sqm + 10 Brookfield - 2017 - 100% committed Mirvac - 2020+ 11 30 The Bond, 30 Hickson Road (ex Lendlease) - 19,700 sqm 28 Wynyard Place - 68,200 sqm DEXUS - H2 2016 - 18% committed Brookfield - 2020+ - DA approved 12 255 Pitt Street (ex-Challenger, Apple) - 15,427 sqm 29 Quay Quarter Sydney - 90,000 sqm ISPT - H1 2017 - 50% committed AMP - 2020+ - Stage 1 DA approved 13 275 Kent Street - 77,125 sqm 30 56 Pitt Street - 21,000 sqm+ Mirvac / Blackstone - H2 2017 - 79% committed DEXUS - 2020+ 14 680 George Street (ex-Ernst & Young) - 62,250 sqm 31 210 & 220 George Street - 17,000 sqm Brookfield / Arcadia - 2017 - 58% committed Poly Real Estate - 2021+ 15 55 Market Street - 15,776 sqm 32 255 George Street - 39,981 sqm CIC - H1 2016 - 50% committed (ex-NAB 22,500 sqm) - AMP - H2 2020 16 201 Sussex Street, DPIII (ex-Marsh & McLennan) - 29,820 sqm 33 Darling Park Tower 4 - 70,000 sqm GPT (GWOF) / AMP (ACPF) / Brookfield - 2017 - 57% committed GPT / Brookfield / AMP - TBC 17 151 Clarence Street - 19,910 sqm (Arup) Investa - Q3 2018 - 29% committed Under construction / completed DA Approved / Confirmed / Site Works Mooted / Early Feasibility 5 New Build and Major Refurbishments Under Construction / Recently Completed pg 7–10 DA approved / Confirmed / Site works pg 11–15 Mooted / Early Feasibility pg 16-18 new build and major refurbishments under construction / recently completed Address Barangaroo, Tower 2, Sydney Developer LLITST 1 Barangaroo T2 Owner LLITST Total Size 88,200 sqm Available 19,700 sqm (Levels 30, 31 & 37-41) Floor Plate Size 2,161 - 2,411 sqm Delivery Date Q3 2015 Tenants Committed St George / BT / Westpac / Gilbert+Tobin Status 89% committed Address 20 Martin Place, Sydney Developer Pembroke Real Estate 2 20 Martin Place Owner Pembroke Real Estate Total Size 15,920 sqm Available 4,050 sqm Floor Plate Size 800 sqm Delivery Date Q3 2015 Tenants Committed Apple / Regus / Hogan Lovett / McGrathNicol Status 75% committed Address 80 Pitt Street, Sydney 3 Developer N/A 80 Pitt Street Owner Yorkban Total Size 11,400 sqm Available 11,400 sqm Floor Plate Size 864 - 880 sqm Delivery Date Q1 2017 Tenants Committed Nil Status Refurbishment of existing building 7 Address Barangaroo, Tower 3, Sydney Developer LLITST 7 Barangaroo T3 Owner APPF / CPPIB / First State / Telstra Super / APG Total Size 79,221 sqm Available 17,098 sqm Floor Plate Size 2,126 - 2,423 sqm Delivery Date Q2 2017 Tenants Committed KPMG / Lend Lease Status 76% committed Address 333 George Street, Sydney Developer Charter Hall 8 333 George Street Owner Charter Hall Total Size 12,500 sqm Available 5,320 sqm Floor Plate Size 970 sqm Delivery Date Q4 2016 Tenants Committed Clyde & Co. Status 57% Under offer Address 200 George Street, Sydney Developer Mirvac 9 200 George Street Owner Mirvac / AMP Total Size 38,676 sqm Available 0 sqm Floor Plate Size 1,300 sqm Delivery Date Q3 2016 Tenants Committed Ernst & Young / Mirvac Status 100% committed 8 Address Barangaroo, Tower 1, Sydney Developer LLOneITST 10 Barangaroo T1 Owner LLOneITST Total Size 101,729 sqm Available 49,301 sqm Floor Plate Size 2,295 sqm Delivery Date Q4 2016 Tenants Committed PWC / HSBC / Marsh Mercer Status 48% committed Address 225 George Street, Sydney Developer N/A 11 Grosvenor Place Owner DEXUS / CIC / CSC Total Size 85,515 sqm Available 12,417 sqm Floor Plate Size 1,996 sqm Delivery Date H1 2016 Tenants Committed Multi-tenanted Status 83% committed Address One Wharf Lane, 161 Sussex Street, Sydney Developer M&L Hospitality 12 One Wharf Lane Owner M&L Hospitality Total Size 6,500 sqm Available 6,500 sqm Floor Plate Size 720 sqm Delivery Date Q3 2016 Tenants Committed Nil Status 0% committed 9 Da approved / confirmed / site works Address 10 Shelley Street, Sydney Developer N/A 13 10 Shelley Street Owner Brookfield Total Size 27,778 sqm Available 0 sqm Floor Plate Size 1,282 - 1,970 sqm Delivery Date 2017 Tenants Committed Suncorp Status 100% committed Address 30 Hickson Road, Millers Point Developer N/A 14 30 The Bond Owner DEXUS Total Size 19,700 sqm Available 16,228 sqm Floor Plate Size 2,250 sqm Delivery Date H2 2016 Tenants Committed Status 18% committed Address 255 Pitt Street, Sydney Developer N/A 15 255 Pitt Street Owner ISPT Total Size 15,427 sqm Available 7,692 sqm Floor Plate Size 1,930 sqm Delivery Date H1 2017 Tenants Committed Status 50% committed 10 Address 275 Kent Street, Sydney Developer N/A 16 275 Kent Street Owner Mirvac / Blackstone Total Size 77,125 sqm Available 16,130 sqm Floor Plate Size 1,492 – 1,845 sqm Delivery Date H2 2017 Tenants Committed Westpac Status 79% committed Address 680 George Street, Sydney Developer N/A 17 680 George Street Owner Brookfield / Arcadia Total Size 62,250 sqm Available 25,925 sqm Floor Plate Size 1,800 sqm Delivery Date 2017 Tenants Committed Nil Status 58% committed Address 55 Market Street, Sydney Developer N/A 18 55 Market Street Owner CIC Total Size 15,776 sqm Available 7,836 sqm Floor Plate Size 1,026 - 1,068 sqm Delivery Date H1 2016 Tenants Committed Westpac Status 50% committed 11 Address Darling Park Tower 3, 201 Sussex Street, Sydney Developer N/A 19 201 Sussex Street, Tower 3 Owner GPT (GWOF) / AMP (ACPF) / Brookfield Total Size 29,820 sqm Available 12,815 sqm Floor Plate Size 1,500 sqm Delivery Date 2017 Tenants Committed Rabobank / Salesforce Status 57% committed Address 151 Clarence Street, Sydney Developer N/A 20 151 Clarence Street Owner Investa Total Size 19,910 sqm Available 14,119 sqm Floor Plate Size 1,250 sqm Delivery Date Q3 2018 Tenants Committed Arup Status 29% committed Address 388 George Street, Sydney Developer N/A 21 388 George Street Owner Investa / Brookfield Total Size 36,151 sqm Available 36,151 sqm Floor Plate Size 1,300 sqm Delivery Date Q4 2018 Tenants Committed Nil Status 0% committed 12 Address Darling Square Developer Lendlease 22 Darling Square, The Haymarket Owner Lendlease Total Size 20,000 sqm Available 0 sqm Floor Plate Size TBC Delivery Date 2018 Tenants Committed Commonwealth Bank of Australia Status 100% committed to CBA.