Sydney’s Inner West: Commercial Property Snapshot

Sydney’s inner west is fast becoming one of the most desirable places to live and work in Australia. Officially extending from Balmain in the north to Tempe in the south, and Newtown in the east to Ashfield in the west, the inner west is home to a population just shy of 200,000.

Throw a stone in any direction and you’ll hit an example of positive growth. From Sydenham’s recently renovated train station, Balmain’s booming residential property market, Summer Hill’s extensive apartment developments, and the consistent conversion of warehouse properties around Marrickville – it’s clear that residents and businesses alike want a piece of Sydney’s inner west.

Below we explore the current state of play in the inner west, and peek behind the curtain at what the future holds for commercial property owners in the area.

The Inner West is Growing, But Who Lives There?

According to 2011 census data, the population of Sydney’s inner west is younger, more educated and better-off financially than those living in Greater Sydney. They are significantly more likely to use public transport to commute to work, and have a household income around $500 greater than the national average.

However, median weekly rental price for residential property is $408, around $100 greater than the state average and $120 more than the national average. The area’s skyrocketing residential prices have even made international news; an article in the New York Times laments the social inequities born out of Balmain’s booming housing market.

These statistics begin to paint a telling picture of the typical ‘inner-westie’. The youth of the area, struggling to break into the property market, are often derided as shallow, entitled and financially wasteful by their elders and those outside council lines. One demographer even claimed the ‘hipster youth’ of Sydney were finding it difficult to overcome the area’s high property prices because of too many ‘smashed avocado’ brunches.

What Does the Inner West Hold for Commercial Real Estate Owners?

The enduring gentrification of inner west suburbs, and its corresponding high tenant demand isn’t only good news for residential property owners.

Businesses, especially those in creative industries like media and communications, are looking to the inner west for offices that satisfy their desire for open-plan, campus-style workspaces.

Owners of warehouse properties in Marrickville and St. Peters are enjoying high demand from a new breed of inner west tenant – the business who craves the smashed avocado brunch from the new cafe on the corner.

However, despite the positive demand for property in the area, commercial owners remain subject to a volatile economy. Existing commercial tenancies can be threatened when times are tough for the small-to-medium businesses; companies that are leading the charge for converted warehouse spaces. On the other side of the coin, a strong supply market can also threaten stable tenancies, should businesses be tempted to upsize at the end of their lease.

What’s clear for commercial property owners in Sydney’s inner west is that they can’t rely on a market of high demand. Property agents with a keen understanding of the area need to be strategic in minimising vacancy and effectively marketing properties in times of high supply.

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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