NSW Government eyes new home for 4000 office workers in Parramatta

It is after A-grade space in a single building under a 10-year lease term with two five-year options.

Property NSW chief executive officer Brett Newman said the government’s office footprint in Parramatta could match that of the Sydney CBD by 2022, if the search went well.

Concept image of the 42-storey tower (left), which could be built on top of Westfield Parramatta. Image: Woods Bagot

“The government is on track to occupy around 250,000 square metres of office space in Parramatta by 2022, representing more than 30 per cent of Parramatta’s office market,” Mr Newman said.

“The government’s current Sydney CBD footprint is about 285,000 square metres and that is likely to further decrease by 2022 as more agencies relocate to other metropolitan and regional areas as part of the Decade of Decentralisation policy.”

The state government’s current office footprint in Parramatta is about 147,000 square metres, which includes 25,000 square metres at the Charter Hall-owned 105 Phillip Street, occupied by the Department of Education.

A further 65,000 square metres at Walker Coporation’s yet-to-be-completed 4 Parramatta Square will be occupied by the departments of Planning & Environment, Industry and Finance, Services and Innovation, which will start in late 2019.

“By sending more roles to western Sydney, the government is bringing jobs closer to people’s homes and reducing congestion on roads and public transport,” Mr Newman said.

“It also reduces the government’s exposure to rising Sydney CBD office rents, with recent Property Council of Australia data showing Parramatta office rents are as much as half of those in the Sydney CBD.”

Westfield owner Scentre Group lodged plans with the NSW government in August for a 42-storey office development – which will be one of Sydney’s largest office towers – on top of its shopping centre in Parramatta. No construction timeline has been released but the project is expected to cost $492 million.

If approved, it could fit Property NSW’s bill, having large floor plates of 3025 square metres and accommodating tenants with bigger floor-space requirements.

Tenants looking in the Parramatta market are generally after larger floor plates and total floor space requirements of at least 35,000 square metres, as they want more open spaces and flexibility when dealing with changing space requirements.

Other options include GPT Group’s 32 Smith Street and the Dexus building at 140 George Street.

The state government is on track to relocate more than 4200 public service roles from the Sydney CBD to western Sydney by 2021 as part of its Decade of Decentralisation initiative. More than 1800 roles have already relocated since 2011.

“Parramatta’s growth as a cultural, economic and investment centre for greater Sydney makes it the logical place to establish a major public service hub and is consistent with the greater Sydney Commission’s vision for Parramatta under its Central City District Plan,” Mr Newman said.

Parramatta has a vacancy rate of 3.2 per cent, making it the second-tightest market in Australia, Property Council of Australia data shows.