An infrastructure boom observed in New South Wales, particularly in Sydney, is driving an increase in office lease inquiries and completed transactions, according to CBRE Group Inc.
Infrastructure projects in the state swelled to A$80 billion from the A$40 billion recorded in 2016, with Sydney leading the whole country, fueled by engineering and construction companies. One of the infrastructure projects expected to affect the market is the A$30 billion Sydney Metro transport project.
In the city's central business district, where prime effective office rents grew 4.5% in the second quarter, Australian engineering contractor John Holland expanded its leasing footprint to over 8,600 square meters, while Bouygues Construction and Golder and Associates are looking to occupy up to 2,000 square meters in either North Sydney, St Leonards and/or Chatswood, CBRE said.
In Sydney's outskirts, construction giant and listed developer Lendlease Corp. Ltd. is taking up 4,000 square meters of office space and international construction company Leightons agreed to occupy 3,900 square meters in the suburb of Mascot, CBRE added.
Stefan Perkowski, head of CBRE's North Sydney office leasing team, said Sydney is transitioning to a "multiple CBDs" city from a "CBD and surrounding suburbs" city.