Australian software giant Atlassian has announced to move its headquarters to “Sydney Central”. Together with the Youth Hostel Association (YHA), Atlassian is planning a 35-storey commercial building at 8-10 Lee Street which is next to the Central train station.
In addition to Atlassian’s new global headquarters, Dexus and Frasers Property are planning to form a consortium to redevelop 14-30 Lee Street into a 145,000 sqm commercial complex comprising a podium targeting tech/start-up businesses (60,000 sqm) with two office towers (85,000 sqm combined).
Both developments form part of the Central Precinct Rezoning Proposal, which is aiming to create a vibrant place that unites a world-class transport interchange with innovative businesses and public spaces to become a centre for future jobs and economic growth.
Why Central?
Key transport hub: The Central Precinct is located at the southern end of Sydney CBD with Central station transport interchange at the core area. Its accessibility will be further improved by future updates of transport infrastructure, such as the Sydney Metro development and the extended Sydney Light Rail.
Proximity to education institutions and amenities: Neighbouring suburbs of the precinct include Surry Hills, Haymarket, Chippendale and Redfern, putting it close to key education institutions where future talent is gathered, such as University of Technology Sydney (UTS) and The University of Sydney.
The fringe regeneration area will also attract start-ups that employ young workers who prioritise a vibrant and well-connected environment with amenity available for extended hours, rather than water views and reputation provided by other CBD locations.
Source: NSW Department of Planning – Content Precinct Draft Strategic Plan
Limited current and future office supply: Although close to education centres and regeneration suburbs, Central has limited prime office space when compared to other precincts in the Sydney CBD. The South precinct, where the two Central precinct projects are located, currently accounts for only 8% of the CBD stock.
Furthermore, future supply in the precinct is limited. Out of 18 tracked new developments in the CBD, none is located at the South precinct.
Source: JLL Research as at 3Q19
Affordability: Average rents in the South precinct are relatively affordable compared with other precincts in the Sydney CBD. Average prime rents in the South precinct are currently 32% cheaper than the Core precinct, 19% cheaper than the Midtown precinct and 18% cheaper than the Western Corridor precinct on a gross effective basis.
The City of Sydney is committed to the redevelopment of the Sydney Central precinct. The announcement by Atlassian supports the view that the precinct will house the expansion of Sydney’s technology sector over the long-term. We believe that Sydney Central has some of the characteristics of the Meatpacking District in New York City and Kings Cross in London. The long-term redevelopment of Sydney Central makes it one of the most exciting regeneration projects in Australia’s history.
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