MARKET UPDATE MACQUARIE PARK, NORTH RYDE AND LANE COVE WEST - MAY 2022
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MACQUARIE PARK,
NORTH RYDE AND
LANE COVE WEST
M AR KE T
U PDA TE
MAY 2022
1
ABOUT CI
As an award-winning property company, CI Australia (CI) sell, lease, manage and advise on a wide range
of commercial real estate assets for institutional, private and government clients. We’re in business to help
people prosper through property and our vision is to be Australia’s most admired and trusted commercial real
estate partner.
Our innovative mindset and client-centric approach are what set us apart from the rest. We’ve worked hard
to earn the admiration and respect of our clients by consistently providing exceptional service and honest
advice, to achieve outstanding results.
Our relationships go beyond business and everything we do is in service of helping not only our clients, but
also our employees and communities prosper through property. We are guided by principles of integrity, being
100% committed, innovative, transparent and accountable.
M A CQU A R I E P A R K M A R K E T U PDA TE 2
INTRODUCTION
Our latest report explores recent commercial property MAR KET SYNOPSIS
activity and the outlook for Macquarie Park, North
Ryde and Lane Cove West. • Promising Transaction Volumes - More than $1.2B in
transaction volumes were recorded in Macquarie
This includes key local Council initiatives in Macquarie
Park and North Ryde in the 2021 Calendar Year. This
Park, such as the ‘Waterloo Road Master Plan’,
represents a 155% increase Year-on-Year (YoY) in
which outlines Council’s ambitions to transform this
capital invested in the precinct.
critical road into a ‘vibrant street’ through ‘active
transport’ and major public realm developments. • Vacancy - Macquarie Park and North Ryde recorded
State Government infrastructure projects such as the a total vacancy of 9.76% in the six months to
connection of the Metro South to the existing Metro December 2021, only a 45 basis point (bps) increase
North line in 2024 will strengthen the accessibility compared to the first half of 2021. Due to their
of these markets, as will the Parramatta Light Rail, competitive rental price points and strong suitability
WestConnex and NorthConnex. to occupiers seeking a ‘hub and spoke’ office model,
they have weathered the impacts of pandemic-
We explore these localised changes alongside key
related occupancy levels better than other key North
macroeconomic conditions - including the low
Shore markets.
unemployment rate, rising business confidence, and
return of tenants to offices across the state - and their • Alternative and Industrial Demand - Demand remains
impact on the outlook for these markets in the short to evident amongst purchasers within alternative asset
medium term. classes such as Data Centres, Build to Rent (BTR)
operators and suburban infill industrial assets in Lane
If you would like to discuss this report or enquire about
Cove West.
how a bespoke market analysis can help you achieve
prosperity through property, we’d be delighted to
speak with you. BEVAN KENNY
MANAGING DIRECTOR,
NORTH SYDNEY
+61 411 223 213
CHRIS VEITCH
DIRECTOR,
INVESTMENT SALES
+61 434 566 355
ANTHONY MERRETT
DIRECTOR,
NORTH SYDNEY LEASING
+61 405 719 566
CI A U S T RA LIA 3
LEASING
The Macquarie Park and North Ryde vacancy rate was Despite a lack of new or A-grade stock, Lane Cove
9.76% in January 2022 according to the Property Council West continues to offer affordable face rents around
of Australia (PCA), an increase of 0.45% since July 2021 $300/sqm net. Its impressive global occupier list includes
and only 1% above its historical average. Cochlear, Netcomm, Motorola, KCI/3M and Phebra. The
provision of warehouse accommodation strategically
This is expected to remain at similar levels while recovery
close to the North Shore, as well as its high parking ratio,
from the ongoing pandemic is yet to be seen in
is Lane Cove West’s strong suit.
suburban markets like Macquarie Park and North Ryde.
Comparatively, North Sydney (16.56%), St Leonards
NET R ENTS
(16.54%) and Chatswood (15.99%) saw their vacancy
rates increase more significantly whilst tenants re-
Suburb Premium Grade A-Grade B-Grade
evaluated their occupational requirements.
North Sydney $950 - $1,200 $750 - $850 $675 - $775
As the Rental Table shows (right), Macquarie Park
continues to provide occupiers with high-quality office Parramatta $620 - $650 $500 - $600 $425 - $500
space, including new build, for half the cost of such
space in North Sydney. North Ryde typically rents at St. Leonards N/A* $660 - $750 $500 - $600
a slightly lower level to Macquarie Park, offering even
Chatswood N/A* $625 - $725 $500 - $550
greater value.
This sees Macquarie Park and North Ryde continue as an Macquarie Park N/A* $450 - $480 $360 - $400
ideal location for occupiers seeking a suburban office
North Ryde N/A* $360 - $420 $300 - $360
as part of a ‘hub and spoke’ real estate strategy. This
strategy is employed by occupiers looking to provide Lane Cove West N/A* N/A** $290 - $320
geographically diverse physical office locations to suit
the lives of its workforce. This strategy gained significant *No premium stock in this market.
momentum once COVID-19 restrictions were lifted, for ** No A-Grade stock in this market.
its ability to reduce commuting time and nurture the
coveted balance between working from home and
in an office.
M A CQU A R I E P A R K M A R K E T U PDA TE 4
LEASING ACTIVITY
Address Tenant Space Type Leased Start Date Starting Rent Term
(sqm) ($AUD) (years)
Macquarie Park
11 Talavera Road Nanosonics Office 4,000 1-Mar-22 $420 5
22 Giffnock Avenue Menulog Office 4,177 – $485
78 Waterloo Road Boehringer Ingelheim Office 3,672 21-Jan-22 $463 5
1 Innovation Road Hunt & Hunt (Renewal) Office 1,173 1-Dec-21 $430 5
5 Talavera Road OPPO Australia Office 700 1-Dec-21 – –
35-41 Waterloo Road Payroll HQ Office 289 1-Nov-21 $320 2
65 Epping Road Carl Zeiss Light Industrial 1,366 1-Nov-21 $289 10
78 Waterloo Road MicroBioGen Office 1,240 1-Nov-21 – –
1 Innovation Road Servcorp Office 1,035 1-Oct-21 – –
13-15 Lyon Park Road Ethan Group Office 896 1-Oct-21 $370 3
13-15 Lyon Park Road Ethan Group Light Industrial 632 1-Oct-21 $225 3
123 Epping Road Brita Water Filters Office 525 1-Oct-21 $389 3
65 Epping Road JVC Kenwood Office 512 1-Sep-21 $360 5
11 Talavera Road Wise McGrath Office 468 1-Sep-21 $460 5
40-52 Talavera Road GN Hearing Office 1,095 22-Aug-21 – –
7 Harbour Street PNSW (TfNSW) Office 8,600 1-Aug-21 $465 10
2 Banfield Road Astellas Pharma Office 628 1-Aug-21 $475 5
3 Thomas Holt Drive Spectris Australia Office 250 1-Aug-21 – –
109-123 Epping Road Avaya Australia Office 1,774 1-Jul-21 $390 5
123 Epping Road BYD Australia Office 411 1-Jul-21 $410 5
North Ryde
1 Epping Road Petbarn Office 2,706 1-Jan-22 $365 4
1 Epping Road Greenlit Brands Office 2,492 1-Jan-22 – –
1 Richardson Place ADM Sydney Office 444 1-Aug-21 $360 16
Lane Cove West
16 Mars Road TCN Channel 9 Light Industrial 540 1-Dec-21 $100 5
16 Mars Road Panavision Asia Pacific Light Industrial 4,282 1-Aug-21 $92 6
16 Mars Road Conekt Australia Light Industrial 186 1-Aug-21 $192 2
31-33 Sirius Road Trannys Light Industrial – 1-Jul-21 – –
CI A U S T RA LIA 5
DEVELOPMENT
N EW O FFI C E DEVELO PMEN T S B UIL D TO R ENT (B TR )
A-grade rents in Macquarie Park have continued to rise With the Waterloo Road ‘spine’ of Macquarie Park now
into the high $400/sqm, with the underwriting of numerous predominantly zoned B3 Commercial Core, an increasing
new office developments in the Macquarie Park supply number of BTR developments may be unlocked. This
pipeline. Competition for pre-lease tenants remains fierce follows the passing of the State Environmental Planning
and demand from data centre operators has provided an Policy Amendment in February 2021 which permitted the
additional user type for the precinct. development of such projects within B3 Commercial Core,
B4 Mixed Use and B8 Metropolitan Centre zonings.
In line with the Macquarie Park ‘20-Year Place Strategy’
(updated June 2021) to deliver an additional 20,000 jobs WATER L OO R OAD MASTER PL AN
and 7,650 homes, there is a significant amount of high-
rise residential development close to public transport As part of the ‘Planning Ryde: Local Strategic Planning
and the university underway, which will increase the local Statement’ (2020), the Waterloo Road Master Plan
employment pool and overall attractiveness of (updated August 2021) will re-establish Waterloo Road as
Macquarie Park. “vibrant street” rather than simply a “movement corridor”,
with the key highlight being the emphasis of “active
transport” in the form of four Metro Station entrances
and exits. Major public realm development includes the
Macquarie Centre Redevelopment (AMP Capital and
Occulus), 36 – 40 Waterloo Road (Frasers Property Group,
Winten Group and Aspect) and the Catherine Hamlin Park
(McGrgor Coxall and the City of Ryde).
7 8
12 11
1
10 5
4a 2a 4b
6 2b 3
9
M A CQU A R I E P A R K M A R K E T U PDA TE 6
DEVELOPMENT ACTIVITY
Estimated Estimated
Project Developer Description
Value Completion
1. Macquarie Winten/Frasers $334.8M November 2022 GFA 83,368 sqm approved over four buildings plus 3,800 sqm
Exchange (MQX) of retail at 1 Giffnock Avenue. MQX4 is an NLA 17,743sqm
office building currently under construction. It was sold in
September 2020 to Ascendas REIT under a development
management agreement for $167.2M.
2a. Macquarie Square, John Holland $327.6M Q3 2026 John Holland has been approved to construct up to 117,017
45-61 Waterloo Road sqm of office space over six buildings due for completion in
2026. Building ‘C’ (The Glasshouse) is 70% leased to Transport
NSW and was sold to Charter Hall for $331.5M in Feb 2021.
2b. Central House John Holland $92.4M Q2 2027 Part of the broader Macquarie Square development, Central
(Building D, Macquarie House or Building ‘D’ is a part-8 and part 15-storey mixed-
use building. It is currently under DA assessment for a total of
Square)
19,470 sqm GFA of space.
3. 85-91 Waterloo Road Goodman $81M Q2 2026 Goodman has DA approval for the construction of a four-
stage development comprising a 22,550 sqm 15-storey office
building due for completion in early 2026.
4a. M_Park, 11-17 Stockland $500M Q3 2026 ‘M_Park’ is a masterplan approved 3 ha site to provide 55,000
Khartoum Road sqm of office space. Construction of Stage 1 (18,000 sqm) has
commenced.
4b. 1-5 Khartoum Road Stockland $50M Q3 2026 Stockland has entered into an option agreement with
Johnson and Johnson to acquire the 1-5 Khartoum Road
site to develop a 10-storey commercial building, estimated
for completion in 2025. The proposed tower may yield up to
10,000 sqm of office NLA, costing approximately $50 million
to construct.
5. 63-71 Waterloo Road UT65 Pty Ltd $218M Q2 2028 DA approved 62,405sqm mixed-use twin tower development
comprising 6,524sqm of retail and 55,880sqm of office. The
19,760 sqm site will reflect a 3:1 FSR and 65 metre height limit,
including a VPA offer to dedicate the rear of the site for a
new road.
6. 40-52 Talavera Road LaSalle $212.3M Q4 2028 LaSalle Investment Management has submitted a Concept
Investment DA for the whole site comprising three commercial buildings
Management (Building A, B & C equating to 37,542 sqm GFA) due for
completion in 2028.
7. 1 Eden Park Drive Kamarice Pty Ltd $52.7M Q2 2022 Kamirice is currently constructing an 8-storey commercial
office building estimated for completion in Q3 2022. At
approximately $52.6 million, the development will span over
9,500 sqm of A-grade office NLA.
8. 45-47 Epping Road Total Forms $72.4M Q4 2026 Stage 2 DA approved for the 3-stage construction of a mixed-
use development comprising two commercial buildings with
ground floor retail. The buildings will span 11,000 sqm GFA
across 9 storeys and 5,067 sqm GFA across 5 storeys.
9. Macquarie Macquarie $200M Q2 2025 Macquarie University will be constructing a 6 and 7-storey
University Innovation University building at 8 - 12 University Avenue for an estimated cost of
$200 million. The development will include both university
Hub, 8-12 University
office and laboratory space as well as commercially-leased
Avenue office with ground floor retail. The commercially-leased office
space will be A-grade and span 25,000 sqm of NLA.
10. Intellicentre 3 East Keppel $289.7M Q3 2024 Keppel REIT has commenced construction of a 6-storey
Data Centre, 17-23 addition to the IC3 East Data Centre at 17-23 Talavera Road.
The development will add 9,097 sqm GFA of space to the
Talavera Road
existing data centre and is due for completion in Q3 2024.
11. City Views Business Goodman $115.4M Q2 2025 Goodman has submitted a Stage 2 DA for the construction of
Park, 65-67 Epping an 8 and 10-storey office building totalling 34,759 sqm GFA at
67-75 Epping Road.
Road
12. Eden Gardens, 307 Thunderbirds Are $155.6M Q4 2028 A DA has been submitted for an 18-storey commercial
Lane Cove Road Go building with a multi-level carpark potentially providing 24,669
sqm GFA of office space.
CI A U S T RA LIA 7
SALES
Interest in Macquarie Park and North Ryde intensified D ATA CENTR ES
over 2021 with over $1.2B worth of assets changing
hands. Singaporean and Hong Kong-based groups with Macquarie Park, North Ryde and Lane Cove West have
domestically based teams remained a key purchaser remained firmly on the radar of data centre operators
group, accounting for 65% of total sales. and occupiers. This is due to the availability of large
landholdings that can be built out at rents similar to
There have been no signifcant sales to date in 2022, office rents, but without the requirement for large lease
however the ESR portfolio comprising North Ryde office incentives.
buildings 10,10a,12,12a Julius Avenue and 1 Lucknow
Road and 15 Talavera Road, Macquarie Park are under In order to fast track this, the NSW Department of
contract. Separately, ESR’s 18 Orion Road, a 9,254 sqm Planning, Industry and Environment has lowered the
office tower with a childcare centre in exclusive due threshold for data centres to be assessed as State
diligence with a buyer. Significant Developments (SSD) from $50M to $30M until
31 May 2023.
The forthcoming 2024 connection of the Sydney
Metro line to the Sydney CBD remains a key driver for This increasing demand is reflected in market moves
purchasers, as do the high-quality and modern office including Microsoft’s purchase of 706 Mowbray Road,
buildings on large lots, and low comparative rental Lane Cove North for $63M in December 2020, where
levels. it plans to build a six-storey, $141 million data centre
on the 1.76 ha site. The Mowbray Road Data Centre
Investment yields are positioned in the low 5%’s with is currently in its early planning stages as a State
capital values for new builds tracking at $8,500 - $9,500/ Significant Development.
sqm and $7,000 - $8,000/sqm for A-grade. AMP Capital
has been the most active seller in the precinct, trading In Macquarie Park, Macquarie Telecom has added a
three assets with a combined value of $472.5M. This 30megawatt (MW) facility in Phase 2 of its existing 10MW
reflects their recently updated strategy following its data centre at its 21 Talavera Road and 6-8 Giffnock
two demerger of AMP Limited and AMP Capital’s Avenue site.
PrivateMarketsCo to focus on scaling its existing Keppel REIT has commenced construction of a six-storey
infrastructure and real estate investment strategies. addition to the existing Intellicentre 3 East Data Centre
The prospect of suburban infill industrial properties at 17-23 Talavera Road. The development will add a
in Lane Cove West continues to attract buyers. This further 9,097sqm Gross Floor Area (GFA) of space and is
includes Tianyi Holdings purchasing 4 Sirius Road, a estimated for completion in Q3 2024.
multi-let industrial complex with an eight-year WALE, for In 2021, AirTrunk opened the first phase of its SYD2
$20.56M. This reflects a 4.1% yield and capital value of 110MW+ hyperscale data centre on 4 ha of land in Lane
$4,816/sqm. Cove West. Costing over $1 billion, this development
Meanwhile, an 8,000 sqm vacant plot of land at 14-16 includes the construction of a 132kilovolt power
Orion Road was also purchased from ESR by private substation.
developer, Hannas, for $13M to build industrial units,
reflecting a land value of $1,640/sqm.
We retain a positive investment outlook for Macquarie Park, North Ryde
and Lane Cove West for the 2022 full year and into 2023. Continuing to offer
excellent value relative to the core North Shore precincts, and combined
with the Sydney Metro, these markets are poised to experience steady deal
flow over the next 12 months.
M A CQU A R I E P A R K M A R K E T U PDA TE 8
SALES ACTIVITY
Price
Address NLA (sqm) $/sqm Yield Sale Date Vendor Purchaser
($AUD)
Macquarie Park
12 Lyon Park Road $21.3M 2,507 $8,496 N/A Dec-21 Jigley Holdings 68 Waterloo Rd
5/1 Talavera Road $1.495M 108 $13,843 N/A Oct-21 Private JR and PM Mathers Holdings
20/5 Talavera Road $848,966 96 $8,843 N/A Oct-21 Private JR and PM Mathers Holdings
9/5 Talavera Road $920,000 96 $9,583 N/A Jun-21 CFJ International 1 Talavera Road Holdings
37-39 Epping Road $55M 8,127 $6,768 5.2% Jun-21 RF CorVal Charter Hall
68-76 Waterloo Road $106.5M 13,486 $7,897 4.8% Apr-21 AMP Capital / TPG Telecom
SunSuper
44-50 Waterloo Road $71M 7,156 $9,922 2.4% Apr-21 AMP Capital ESR
2 Lyon Park Road $8.545M 9,780 $874 N/A Mar-21 Local Investment NSW Land and Housing
Fund Corporation
1 Giffnock Avenue $167.2M 19,384 $8,626 6.1% Feb-21 Winten / Frasers Ascendas REIT
2 Banfield Road $142.7M 14,874 $9,592 5.1% Jan-21 Goodman AEW Capital
1 Thomas Holt Drive $295M 39,369 $7,493 5.2% Jan-21 AMP Capital Ascendas REITW
North Ryde
82/32 Delhi Road $750,000 94 $7,979 N/A Nov-21 Private Doherty & Associates
35/54-56 Delhi Road $1.05M 129 $8,140 N/A May-21 Development Group Chez Black 1949
3 Richardson Place $115M 17,187 $6,691 6.7% Mar-21 Goodman Quintessential Equity
Lane Cove West
4 Sirius Road $20.56M 4,269 $4,816 4.1% Oct-21 Hiprof Holdings Tianyi Holdings
77 Mars Road $6.5M 2,428 (site) $2,677 N/A Oct-21 Vestline T Sarkis Enterprises
(land)
16/2-6 Chaplin Drive $1.3M 246 $5,285 N/A Aug-21 Pacific Image Macquarie Place Nominees
11/27 Mars Road $750,000 124 $6,048 N/A Jul-21 Private B & H Packaging
8/27 Mars Road $600,000 86 $6,977 N/A Jul-21 Cromer Property Private
Investment
13/79-85 Mars Road $1.01M 104 $9,712 N/A Jun-21 Private Menzies Family Holdings
6/2-6 Chaplin Drive $820,000 196 $4,184 N/A May-21 Chaplin Drive Private
Investments
4/21 Mars Road $2.2M 1,273 $1,728 N/A Apr-21 Delatite Pastoral Private
Company
31/27 Mars Road $570,000 132 $4,318 N/A Mar-21 HW Property Group Cloud Solution Centre
14-16 Orion Road $13M 7,922 (site) $1,641 N/A Feb-21 ESR Hannas Group
(land)
CI A U S T RA LIA 9RECENT SALES
Multi-let industrial complex with eight-year WALE, this 1,120 sqm office and 3,149sqm warehouse
1. 4 Sirius Road
offering was acquired by Tianyi Holdings in Oct 2021 for $20.56M.
2. 77 Mars Road A 2,428 sqm site with a two-storey office and single-storey warehouse acquired in Oct 2021 for $6.5M.
A 7,922 sqm vacant site purchased by Hannas Group to develop a multi unit industrial complex. Sale
3. 14-16 Orion Road
prices are understood to average $6,800/sqm.
4. 18 Orion Road A 9,254sqm office tower with childcare centre owned by ESR - on market in April 2022.
M A CQU A R I E P A R K M A R K E T U PDA TE 102
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11CI AUSTRALIA PTY LIMITED
Level 7, 2 Elizabeth Plaza
North Sydney, 2060
www.ciaustralia.com.au
Disclaimer: This report has been prepared by CI Australia Pty Limited (“CI”) concerning information about Macquarie Park, North Ryde and Lane
Cove West Office Market Update. This report is given for information purposes only. CI does not give any warranty of reliability, accuracy, currency or
completeness of any of the information supplied nor does it accept any responsibility arising in any way (including by reason of negligence) for any
errors or omissions in the information provided. The information in this report is subject to change without notice and may include certain statements,
estimates and projections with respect to anticipated future performance. No representations or warranties are made as to the validity of those
assumptions or the accuracy of those statements, estimates or projections. Any interested party should form its own views as to what information
is relevant to any decisions it makes and make its own independent investigations and obtain its own independent advice. This report does not
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