Office erosion in St Leonards continues: Colliers
St Leonards continues to experience office erosion as stock continues to be earmarked for residential conversion, according to Colliers International’s latest Metro Office report.
“In the last six months, St Leonard’s vacancy has increased from 8.5 percent to 10.5 percent in January 2017 as tenants relocate to other metro markets.
"As previously mentioned, Jacobs relocated from 100 Christie Street to North Sydney, adding a contraction of just over 7,000sqm, Flexirent downsized 4,100sqm and 2UE vacated 170 Pacific Highway handing back 1,094sqm of space.
"These tenant moves contributed to a total six month net absorption of -22,878sqm,” the report stated.
Despite vacancy increases there is a strong prospect of a stronger residential market Colliers says.
“18,489sqm was withdrawn in the six months to January 2017 with a further 30,000sqm due to come offline in 2017, 18,500sqm of which will be redeveloped into a mixed use precinct (88 Christie Street).
"The next supply cycle will commence in 2019 with Royal North Shore Hospital fully committing to a 36,000sqm office development as well as Mirvac’s 472 Pacific Highway (4,600sqm).
"Mooted schemes are Gore Hill Technology Park (46,000sqm) and 18-20 Atchison Street (2,300sqm).
"Despite the increase in vacancy, the prospect of a stronger residential market encroaching on existing buildings and development space saw net face rents increase 21.5 per cent and incentives fall two percentage points in the last 12 months, with positive net effective rental growth expected to continue over the remainder of 2017,” the report advised.
A 144 sqm office at St Leonards (above) has been listed for sale.
Similarly a 67 sqm office at St Leonards (below) has been listed for $425,000.
A 96 sqm office at 51/6-8 Herbert Street, St Leonards (below) was sold in April.
Similarly a 4605 sqm office at 2 Chandos Street, St Leonards (below) was sold in April.
