Why more businesses are setting up shop on the Lower North Shore

When it comes to commercial real estate draw cards, few locations can currently match the pulling power of Sydney’s lower north shore.

Demand for office space in the area is booming, with the North Sydney office market recording Australia’s sharpest vacancy rate drop in the first half of 2018, according to figures from the Property Council of Australia.

The reason, say experts, is simple, with the area’s major hospitals and critical infrastructure such as the proposed Crows Nest metro station serving as the hub of an evolving and dynamic medical precinct.

“Hospitals are like airports – they’re really big business generators,” says REINSW president Malcolm Gunning. “Wherever these types of medical precincts are established, such as in the lower north shore, a lot of the value and interest in those areas is underpinned.

The North Shore Health Hub is expected to be completed by 2020.

“Not only do you tend to get specialist doctors moving in, you also get businesses associated with medical practices, such as accountants who do medical work, businesses that supply medical equipment, and even design companies that do work with operating theatres. You also get lifestyle-related businesses…like fashion and beauty.”

With real estate requirements of medical businesses differing to that of conventional organisations, Gunning says specialist developments and office space catering specifically to medical professionals are in high demand.

“Doctors won’t go into general office space because they require features not readily available in normal commercial space,” he says.

“For example, they need more car parking, they need larger lifts, and a front door and a back door, because doctors will not walk through their reception area to come to work.”

According to lower north shore real estate specialist Peter Matthews, residential developments that combine commercial real estate space are also proving extremely popular, with medical businesses among those taking advantage of close proximity to clientele and surrounding related businesses.

“We’re seeing a lot of new residential buildings going up that generally have commercial space underneath, and some medical businesses are taking advantage of those premises,” he says.

“It’s an affluent area, and these developments mean that people can go and get x-rays and ultrasounds and all those sorts of things done in handy locations.

Office space catering specifically to medical professionals, such as in the new North Shore Health Hub, is in high demand.

“You also generally find that industry follows industry, so if you’ve got x-ray and ultrasound businesses moving into an area, then you get pathologists and other similar services that follow. Even if it’s not medically related, days on market for these types of properties is not very long.”

The North Shore Health Hub development, located in St Leonards, reflects the concerted drive to transform the area into an established medical precinct.

Developed by Dexus, the facility represents a new opportunity for healthcare businesses to position themselves in an area that services a growing community.

Opposite Royal North Shore Hospital and with direct bridge access to North Shore Private Hospital, it’s easily accessible via train, bus, major road networks and the new Metro.

“The North Shore Health Hub is a new benchmark in healthcare workspace,” says Brenton McEwan, co-head of development origination at Dexus. “This facility is being purposely built specifically for the medical industry with the benefit of Dexus’ 30 years of workplace knowledge and will establish a strong community of like-minded professionals.

“It will include facilities that you would only expect to see in premium office buildings, including a high-end concierge and lobby, quality cafes, an exclusive outdoor terrace and generous secure car and bike parking.”

Occupants will also have access to hotel-grade showers, vanities and lockers.

McEwan says that the multi-tenanted facility has attracted a range of medical professionals and organisations, including individual specialists and national health providers such as Ramsay Health Care and GenesisCare. Work on site has now started, with construction expected to be completed by the end of 2020.