Navitas office property in Sydney's Chippendale listed

Sydney’s fringe suburb of Chippendale is experiencing a property boom of sorts, given the significant stock withdrawal from office to luxury residential.

But there is also the competing trend of office tenants wanting to stay close to the city.

The city fringe market is tightly held given its proximity to the CBD, the light rail and amenities. 

The recent conversion of Griffith Teas is a case in point where new residential gross realisation benchmarks have been realised that are usually reserved for Sydney Harbour waterfront property, according to Savills.

Tenants are expected to be faced with an ongoing squeeze on available office space as demand remains strong and new supply muted.

Savills have a refurbished, leased office property at 39-47 Regent Street, Chippendale to be sold by expressions of interest closing May 25. 

It is fully leased by Navitas Limited, an ASX 100 listed company. The lease is for 15 years with a further option to extend by 10 years. 

The annual net rental is circa $1.823 million. 

The zoning is B4 Mixed Use, which the agents say allows a purchaser the option for residential conversion beyond the existing lease tenure.

These strong fundamentals are expected to drive rents significantly higher over coming years, say the agents. 

The property is being marketed by Savills agents Simon Fenn, Graeme Russell and Tim Grossman along with CBRE on behalf of Property Bank Australia.

Simon Fenn of Savills NSW said strong interest is expected from local, interstate and off shore buyers given the compelling fundamentals of the city fringe market and the unique nature of the asset.

“There appears to be no significant supply in the pipeline for the City Fringe, with just 5,500 sqm currently under construction in Chippendale (expected in H2 2018). Future supply in the City Fringe remains severely constrained due to limited available sites and significant stock withdrawals for residential use,” he said.

With the building flanked on all sides by action from Sydney University, Broadway Shopping Centre, UTS and Central Station combined with significant planning changes in the wings, the precinct is set for exciting growth and change.