Some $4.8 billion worth of projects are now under construction in the CBD, according to a new analysis of projects worth more than $10 million by CoreLogic.That is an unprecedented level of activity for Sydney – or any other
Australian city for that matter. And it’s only going to get busier with a further $3.1 billion of approved works still to commence and scheduled for completion by 2025.
Billionaire Bob Ell, who has developed some of the big buildings in Sydney over the past three decades, says the new projects are long overdue.
“They are building them bigger and better than ever before – and they should be, Sydney is a mess,” he says from his Hunter Street headquarters in the heart of the Sydney CBD.
“The city of Sydney looks like an old city – there aren’t many buildings that would meet world standards.”
Ell, 73, has built his fair share of Sydney office towers, including the Allianz headquarters on Market Street which once boasted the biggest floor plates in the city. He has also seen plenty of developers and planning departments come and go as the hotch-potch of Sydney office towers and apartment buildings get approved and delivered.
He says the latest surge in development is not about good planning but more to do with the record low cost of debt and the realisation Sydney lacks fresh new office space.
Corelogic’s Eliza Owen says the high levels of development in Sydney CBD are likely the result of several culminating factors.
First, there are the state-led infrastructure projects that reflect the strong fiscal position of the NSW government.
“High levels of stamp duty revenue from the housing boom, and various asset sales, have likely strengthened its ability to implement transport and cultural upgrades,” she says.
The new light rail – costing more than $2 billion – and the new $12.5 billion metro railway are the big ticket infrastructure projects in the CBD.
The head of Property NSW Brett Newman says melding the infrastructure spend with property development and acknowledging the city as a place to live and work is the most complex part of the city’s rebirth.
“The challenge over the next decade is to ensure NSW government infrastructure aligns with CBD development, particularly in relation to the major developments such as the Sydney Metro, the over-station developments at major CBD Metro stations, Barangaroo, Circular Quay, the Bays Precinct and the ongoing development in Darling Harbour.”
Source: Financial Review.