Sydney's future will have malls as central hubs and a thriving tech industry

This vision was borne out by Peter Allan, outgoing chief executive of Scentre group, the country’s largest retail landlord at the results in August, who said its Westfield living centres were evolving into hubs with swimming pools, medical and bank branches and large-scale “experience-based” tenants.

CBRE’s NSW executive managing director, Andrew Roy, said that as Australia emerges from the pandemic, Sydney’s position as a global gateway city and investment hub is firmly back in focus.

Despite the current climate of uncertainty, Roy said the outlook was positive across all major commercial property asset classes.

“At a more fundamental level, Sydney is expected to be at the forefront as ESG considerations, consumer expectations and technological advancements reshape the property industry and investor decision-making,” he said.

Roy and the author of CBRE’s Future Sydney report, Sass J-Baleh, said that by 2030 Sydney would be entrenched as a global tech and life sciences hub, aided by the rise of technology-related businesses and the city’s competitive advantages.

Early evidence of this can be seen in the development of the $3 billion Central tech hub by Dexus and Frasers Property Australia, anchored by the Atlassian tower.

“To accelerate the tech sector in the precinct, the NSW government is providing rebates on rents and fit-outs for ‘scale-up’ businesses who move there,” J-Baleh said in the report.

“The pandemic created significant disruption for office users, with lockdowns and an increased adoption of hybrid working once Sydney reopened.”

JLL’s tenant representation NSW senior director, Sadaf Mayar, said technology-focused companies had overseen significant growth during the pandemic and wanted to increase their office footprints in Sydney’s CBD.

“Gaining an edge in the war for talent, improving brand image, cost efficiencies and a better working environment are the key benefits these firms want from high-quality real estate,” Mayar said in JLL’s Tenant Perspectives report.

Another significant change in outlook for property concerns the area known as ESG – environment, sustainability and governance – which will be at the heart of corporate decision-making as net-zero carbon buildings become the norm.

Roy said company brands would be intrinsically tied to how they affected society, and climate tech was the largest venture capital vertical.

Population growth would also be a critical driver in getting the economy back on track.

“Population growth alone will drive demand for an estimated 450,000 square metres of office floor space, $1 trillion in discretionary and non-discretionary retail goods and 2.3 million square metres of industrial and logistics floor space between now and 2030,” J-Baleh said.

This will be essential, as the latest office occupancy survey by the Property Council of Australia showed. It found the number of people going back to the office plateaued in August. The data revealed that office occupancy levels in Sydney for August were 53 per cent, with most people going to their workplace on Tuesdays, Wednesdays and Thursdays – known as the TWATS.

In response, the property council’s NSW deputy executive director, Lauren Conceicao, called for the state government to continue to support the CBD to “ensure the welfare of our economic engine room remains strong, vibrant and attracts people from across the world”.