Light Rail set to ignite south Sydney commercial market
Sydney’s new CBD and South East Light Rail network is set to deliver a shot in the arm for commercial property in the city’s south, agents say.
The new public transport corridor, which will connect Sydney’s CBD to Randwick and Kingsford, through Surry Hills, will make commercial property in the surrounding suburbs eminently more accessible and attractive to investors, according to Gunning Real Estate’s Daniel Gunning and Tom Speakman.
Gunning and Speakman, whose agency specialises in commercial property in Sydney’s metropolitan city fringe, say it’s a case of short-term pain for long-term gain for property investors prepared to ride out the Light Rail’s construction period.
“A lot of more astute property investors look to those things in the long-term and think, ‘well if I buy now, it’s still under construction and there’s a lot of roadworks, people might not see the value in it’, but they can see the uplift in five, 10, 15 years down the track,” Speakman says.
“It’s about ease of access for people coming to and from the city to get to those areas and those properties. If those properties are offering a service for customers, whether it be hospitality, or food and beverage or a supermarket, it’s going to create a much easier flow from the CBD to those specific locations along the Light Rail route.”
“They’re really going to get the uplift in value in the long run. It’s going to improve the streetscape because it’ll all be nicely manicured and really well presented. It’ll be well lit, the buildings will look nicer, it’ll be more pedestrian-friendly. The Light Rail will be a huge hit in these areas.”
Parts of the 12km CBD and South East Light Rail system are already under construction, while the final sections are to be completed in late 2017.
Gunning says the increase in transport infrastructure is effectively widening Sydney’s traditional CBD area.
“It’s helping Surry Hills become a part of what was known as the CBD area. The city is growing, and really the growth is all south,” he says.
“We’ve seen the emergence of Green Square in Alexandria, which, when it’s completed, will be not only a densely-populated residential location but will also be a town centre and almost like a second CBD for the city.”
Gunning says that while some commercial property owners are laying low until the Light Rail is built, others are holding fire until after July’s Federal election.
“People have pulled back, I think, because they want to see who the leader will be,” Gunning says.
“They just really want to have a defined direction.”
But those who wait might miss their chance, Speakman says, with foreign demand for commercial property in Sydney’s inner south currently at unprecedented levels.
“I’d say probably 50% of our enquiries would be international investors. There’s a lot of mainland Chinese, and also from India, the US a little bit, predominantly Asia, Singapore, Hong Kong.”
“We’ve still got record low interest rates, so money’s cheap. We’re still seeing a huge appetite for commercial investment stock, freehold assets especially, and also for stock with some development upside.”
“With all these things that we’re experiencing in the marketplace, I’d say it’s a really great time to put your property on the market. We’re getting huge levels of enquiry, and I’ve never really experienced better selling conditions.