Why Sydney’s Businesses are Looking to the Inner West

Once upon a time, a high-rise office in the CBD was a prerequisite to success for Sydney businesses. It communicated prestige to customers and clients, delighted employees with a cafe on every corner, and offered invaluable networking opportunities without leaving the ground floor lobby.

Today, however, Sydney businesses are broadening their horizons beyond city walls.

Below we explore how the gentrification of inner-west suburbs and the persisting appeal of converted properties in the city fringe have eroded the need for office space in the heart of the city.

Sydney CBD-You Later

Today’s white-collar working culture is a world away from what it was 20 years ago. Co-working spaces are big business, offices are designed with employee collaboration at front of mind, and sleeping pods and bean-bags sit beside hot-desks and fully furnished kitchens.

This evolution of the modern workplace can be put down to a few things. First, attracting and retaining employees is a profitable exercise.

Second, the idea that a collaborative and campus-style workplace can fuel innovation has captivated businesses in creative industries. A Deloitte report found that Australian businesses that prioritise collaborative workplaces are five times more likely to experience a considerable increase in employment, twice as likely to be profitable and twice as likely to outgrow their competitors who did not.

Third, converted, warehouse-style properties have cultural and aesthetic appeal. Blue-chip commercial properties like 63 Ann Street, Surry Hills and the recently-converted 531 South Dowling Street space in Surry Hills reflect this demand for open-plan, campus-style properties, particularly in the creative services industry. The South Dowling Street property was formerly the historic Sydney Antiques Centre, yet now houses one of Sydney’s many advertising agencies, The Monkeys.

Modern workplace culture no longer fits easily into the cubicle. The forward-thinking Sydney businesses hoping to capitalise on positive retention, evolving client and employee expectations and the financial benefits of collaboration are forced to look further afield than the CBD.

Where’s Hot for Commercial Property Owners?

The de-commercialisation of the Sydney CBD isn’t only down to fashion or preference. The tide of residential conversion in the Sydney CBD is a concern for government, who are planning to strip existing incentives for residential construction.

Nonetheless, it’s clear that commercial spaces in the city fringe will retain their high demand, especially those that cater to the modern collaborative workplace. As traditionally industrial areas like Marrickville evolve, warehouse spaces like those along the Princes Highway are ripe for the picking by those with conversion in mind.

Marrickville was once a booming manufacturing hub, even occupied by General Motors, but the shift towards a services economy has left many properties vacant.

Yet it’s not only owners of warehouse-style properties in Sydney’s inner-west who are profiting from the CBD exodus. Traditional office spaces in the inner-west are also in demand. Furthermore, the gentrification of suburbs like Newtown, Alexandria, and Erskineville has fuelled strong tenant demand and positive rental returns. Record-breaking residential auctions in Summer Hill and Haberfield also have home-owners jumping for joy.

Part of the challenge for owners of commercial real estate in Sydney’s inner west will be marketing their property. Warehouse-style properties, for example, can be as attractive for their history as their square meterage. Agents must confidently communicate the cultural value of the property, and why businesses shouldn’t hesitate to look beyond the CBD.

To read more about how commercial property owners can minimise vacant periods, download your copy of our free eGuide, ‘How Commercial Property Owners Can Avoid the Vacancy Plague’ below:

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