Developments around the new Northern Beaches Hospital are expected to boost property activity in the area.
Sydney’s northern beaches are becoming very active with new developments and infrastructure spilling over from the busier areas of Macquarie Park, North Ryde and even Chatswood.
While it’s a niche market, agents say demand is rising from a range of tenants looking for campus-style properties, larger number of car-parking bays, but without the higher prices of the more established northern suburb commercial hubs.
Generally, office vacancy is sitting under 10 per cent, while industrial sites are becoming rare which has bumped up prices.
The new development around the new Northern Beaches Hospital is expected to have a positive impact on property activity in the area, with Frenchs Forest anticipated to undergo gentrification in the coming years
There is also the proposed redevelopment of the North Head area, possibly into aged care or hotel-style businesses.
The latest property sale in the area was at 18 Rodborough Road, Frenchs Forest. The 3435 square metre office building sold in an off-market deal for $9.6 million with a net yield of circa 10 per cent. JLL’s director of metropolitan sales & investments for NSW, Paul Hunter, and JLL’s director of industrial for North Sydney, Ben Byford, managed the sale of the property on behalf of a private investor to PAIM Pty Ltd.
Mr Hunter said the property achieved a good sale price given the anticipated increasing value of the wider area, and the security of current long-standing tenants including Conair, who has 1250 square metres of space in the office building.
“The Frenchs Forest area is undergoing an upgrade, with about $400 million in road infrastructure works planned to reduce traffic congestion, including overpasses,” Mr Hunter said.
“This area is becoming increasingly sought-after by investors who are looking at the long-term, projected growth for Frenchs Forest, taking into account planned infrastructure around the Northern Beaches Hospital.”
The Northern Beaches Hospital project is already well under way, and is expected to be completed during 2018. Proposed road infrastructure upgrades include areas of Warringah Road, Wakehurst Parkway, Naree Road and Frenchs Forest Roads.
Mr Byford said rents and capital values have been fairly stagnant in Frenchs Forest area over the past decade.
“However, this is likely to change with the arrival of the hospital and draft Local Environmental Plan with mixed-use zonings due to go on public exhibition in the coming months,” Mr Byford said.
Luke Crawford, assistant research consultant at Knight Frank, said the nothern areas of Sydney are performing well, helped by the conversion of offices into apartments, particularly in North Sydney and Chatswood.
“Rental growth has been most pronounced within the North Sydney and Chatswood prime markets over the past year,” Mr Crawford said.
“Commercial sales remain strong, totalling $1.2 billion over the 2014 calendar year.”