Office project to wake up Mascot
Plans for a $200 million office project in Mascot, a sleeping giant suburb on the edge of Sydney’s airport, is the latest sign of confidence by investors in the potential of the fringe town centre to develop into a thriving office precinct.
Property development group Tipalea Partners has lodged a development application for an 18,000-square-metre commercial building at 50 Kent Road after purchasing the 5000-square-metre site for about $40 million, with a pre-lease campaign, run by Colliers International, to begin within the next few months.
The building, designed by Sissons Architects, will have 600-square-metre of end of trip facilities, real time air quality monitoring, a wellness centre and a 200-metre running track.
Scott Spanton, chief executive at Tipalea Partners, said Mascot was attracting increased institutional interest because of the relative value of rents and capital values in the area compared to the CBD and other city-fringe markets.
“Never before has Mascot been able to deliver a ‘next generation’ office development – historically the rents achieved in Mascot were too low to allow much of a construction budget,” Mr Spanton said.
“However, with the capital values now achievable in Mascot, we are able to provide a generous construction budget to deliver the latest and greatest features in a workspace.”
The new project at 50 Kent Road follows the development of the 35,000-square-metre Connect Corporate Centre by Goodman Group which was sold last year to fund manager AMP Capital for about $300 million on a circa 5 per cent yield.
It is now leased to the likes of Land Rover, Department of Agriculture, Qantas and Lendlease.
Colliers International’s Michael Crombie said Mascot was increasingly attractive to tenants given good transport links and comparably cheaper rent at about $650 per square metre gross for a new A-grade building compared to about $950 per square metre in the fringe markets of Surry Hills and Pyrmont.
“We have found that when commercial occupiers look to renew their leases in the CBD and city-fringe they are shocked at the rental increase over the past few years. They are forced to look further afield for value and are often quite surprised at what areas like Mascot have to offer in comparison.”
Last year, in a major coup for the south CBD fringe market, petrol station giant Caltex snubbed the Sydney CBD in favour of moving its headquarters to Alexandria, which is a neighbouring suburb to Mascot.
