The Liverpool office market is tightly held with limited transactions occurring over the past few years, according to Ray White commercial research. It's driven by a strong local investor and developer market but there have been limited prime assets traded in recent times.
The robust growth in Liverpool CBD isn't unnoticed by a broader pool of buyers and this has been instrumental in tightening the yield range from 6 per cent to 7 per cent for prime assets, depending on the lease.
The region is home to a variety of stock and in the last 20 years larger public administration movements have seen the addition of more modern accommodation options. We're also likely to see increased demand for assets coming from both Wollongong and WSU universities.
As occupancy costs across more traditional office markets, like Sydney CBD, Parramatta and North Shore, have increased due to reducing vacancies, many small to medium businesses have considered suburban options and that's grown demand levels.
Liverpool CBD also offers good-quality retail and transport options, making it an accessible employment location to cater for the growing Western Sydney.
It's also had a positive effect on the rental environment, growing occupation costs, resulting in owners holding their assets. Encouraging for the region has been the State Government's commitment to Liverpool in its Cities Plan, identifying it as a future growth node for work and play, highlighting the likelihood of ongoing office development which will further rejuvenate Liverpool CBD.
The Liverpool office market comprises more than 277,000 square metres across 120 buildings. Of these, 57 properties are identified as low-grade quasi office/retail premises less than 1000sqm, those more traditional offerings over 1000sqm represent 243,000sqm.
A-grade stock represents 28.65 per cent of this total market across five larger, modern facilities in the core CBD. These assets are highly occupied by public-sector tenants and offer larger, modern floor plates and offer higher sustainability ratings.