CBD-edge investment boom defying Covid doomsdayers

Investment in Sydney’s Haymarket has hit a five year high, to defy Covid doomsday predictions of a collapse of the CBD real estate market.

According to research from Colliers, the popular Sydney district, long known as the home of Chinatown and Paddy’s Markets, achieved a record level of investment in 2021 despite the pandemic.

One of the main drivers behind the rise in activity is demand from Asian-based capital looking for strong investment opportunities.

The value of assets traded in Haymarket in 2021 reached $567.46 million from 14 sales, up from the $551.22 million traded in 2020 and $540.4 million in 2019, Colliers Research data revealed.

That compares to just two assets with a total value of $89.25 million trading in 2016 and three assets trading for a total of $189.7 million in 2017.

Investment in Sydney’s Haymarket has hit a five year high, to defy Covid doomsday predictions of a collapse of the CBD real estate market.

MORE: NSW regional areas set to boom

Tenant turmoil: where rents are rising faster than prices

The make up of sales in the Haymarket area on the southern edge of the Sydney CBD, has also changed over the course of last year. There were a higher volume of sales but the average size of the sale was smaller.

“In 2019 and 2020 there were only six transactions a year in Haymarket averaging around $90 million per deal, while in 2021 we had 14 transactions averaging around $40 million each,” Colliers National Director Asia Markets Steam Leung said.

“The nature of the deals has also changed and we have seen the demand for local hotels catapult comprising 58.97 per cent of total sales in Haymarket during 2021, with investors actively targeting either refurbishment or repurposing.”

The much talked about Tech Central precinct, AKA Central Place Sydney, Australia’s answer to Silicon Valley, is another factor that has boosted interest in the area.

Supplied Editorial

Atlassian has announced plans to build the world’s tallest hybrid timber building for its new headquarters in the tech precinct at Central Station.

Atlassian and AfterPay are two of Australia’s leading tech companies who have committed to housing their headquarters in the area where construction on the first phase of the project is expected to be completed in 2025.

Central Place Sydney project director Kimberley Jackson said the world-class tech precinct would rejuvenate Central as one of the key gateways to the Sydney CBD and underpin Tech Central as Sydney’s tech and innovation hub.

“The connectivity of the site to Australia’s busiest interchange, Central Station, and links to the neighbourhoods of Surry Hills, Chippendale, Eveleigh, Haymarket and Darling Harbour will contribute to a vibrant destination supporting Sydney’s 24-hour economy,” she said.

Tech Central is expected to be become a vital new CBD hub.

Vision for a new public square at Tech Central.

“Haymarket is not only being reactivated, it is being transformed and is understandably of great interest to a range of property investors,” Colliers National Director Asia Markets Joseph Lin said.

“Given Australia’s proximity to Asia we have received unprecedented levels of inbound investment from the region. During 2021 capital from Asia represented 68 per cent of total offshore investment in Australia and we predict this will significantly increase into 2022.”

MORE: Prepare for ‘war’, Rich Dad author warns

‘In over their heads’: looming rate rise pain for one in five homeowners