Strip back the paint, rip up the carpet: How office owners can make their building stand out
When it comes to making your property stand out in the crowded Sydney market, it turns out that “the older, the better” and “less is more” are two adages that still hold true even during a global pandemic.
The demand for properties with an architectural point of difference in the city remains strong, with heritage-listed properties outperforming other office stock both pre and post-COVID-19 crisis, according to Colliers International’s Tom O’Neill.
“Warehouse office conversions are limited within the CBD and offer a point of difference, integrating historic features that provide a sense of character to the office. Such properties are attracting far greater interest and capital values than traditional commercial stock due to shortage of supply and increasing demand,” Mr O’Neill said.
To ensure their properties can benefit from the trend, he’s been advising clients to restore their building as close to their original state prior to listing on the market.
“Absolutely if there is opportunity to reveal and restore heritage elements of the property, this can add substantial value to the property,” Mr O’Neill said.
He’s sold five properties in the past 12 months using this approach and has just listed another property within the former Reid House warehouse following a renovation focused on restoring heritage elements.
The 93-square-metre office at Suite 18, 75 King Street was subject to extensive refurbishment works, which included removing carpets, sanding and polishing the original timber floors as well as a kitchen upgrade.
“The building is a classic Federation warehouse office conversion in the epicentre of the city within the prized King Street precinct,” Mr O’Neill said, adding that the listing would likely appeal to boutique law firms, accountants or creatives.
The two strongest sales by capital value per square metre within the CBD this year have both been heritage properties, according to Mr O’Neill.
This includes Suite 311 at 350 George Street, Sydney, which was sold for $23,485 a square metre in April, while a 275-square-metre office at 64 Castlereagh Street, Sydney, sold for $23,272 a square metre in July.
Aside from aesthetic considerations, low interest rates are likely to drive continued demand in the small-office market despite fears about high vacancy rates in the city’s overall office market, post-pandemic.
“Small offices, particularly those available to move into in the short term, continue to attract the greatest level of interest,” Mr O’Neill said.
“This is being driven by boutique owner-occupier businesses seeking to take advantage of the record low interest environment and cost saving advantages of purchasing rather than leasing. We expect to see demand increase further from such buyers given the RBA’s lowering of the official cash rate this month from 0.25 per cent to 0.10 per cent,” he added.
