Workers follow the crowds to Chippendale, now one of Sydney's hottest office markets

“It’s probably even taken over from Surry Hills now as a desirable location,” says Miron Solomons, director of investment services at Colliers International.

“The re-gentrification of the area following the development of Frasers’ Central Park has been huge, and it’s so close to the city and Central station with excellent infrastructure and UTS [the University of Technology Sydney] nearby.

“In the last 12 months, it’s probably seen the most change of any of the suburbs close to Sydney’s CBD.”

Over that period, the fringe became the fastest growing office market in the country, on Colliers’ figures, with net effective rents for A-grade space growing a massive 30.7 per cent in the year to March 2017. At the same time, B-grade commercial space rents increased by 19.5 per cent.

Much of that is down to both the attractions of Chippendale’s location only two kilometres south of the CBD, and the continuing revival of the suburb by the vast Central Park development on the old Fosters brewery site, with apartments, offices, a hotel, student accommodation, shops, cafes and restaurants such as those along Spice Alley.
Sydney’s inner south, with Chippendale to the middle of the picture on the left of the railway tracks. Photo: Supplied

With such change, it’s as if Chippendale is now almost becoming Sydney’s own SoHo, says Matt Pontey, senior executive at Colliers International, ”and becoming one of the city’s most hotly contested locations”.

Joshua Watts, of fringe specialists Karbon Property, also sees Central Park has having launched a period of intense change. “I think that’s definitely the biggest factor, Frasers’ commitment to Central Park,” he says. “Public perception of that area is now really changing.

“We’ve seen office rents go from $475 per square metre per annum to over $600. It’s certainly one of the hottest emerging markets, and has a very diverse range of occupants.”

The demand for office space from a variety of companies has also proved a major driver of higher rents and prices. The number of old Victorian industrial warehouses in the area is attracting firms mostly from the creative industries, such as tech, arts and media, who are looking for character buildings with high ceilings and exposed timbers to either occupy directly or to refurbish and repurpose.

With so many educational institutions in the area too, such as UTS, Sydney University, the University of Notre Dame, the International Grammar School and the Australian Performing Arts Grammar School, competition for such properties is fierce.

That, combined with limited supply, has seen incentives falling sharply too – A-grade offices by three percentage points to 19 per cent, and B-grade five points to 16 per cent.

One warehouse, built in 1900 at 14-16 Buckland Street, was bought recently for $11.25 million by UTS.

14-16 Buckland Street, Chippendale was bought by UTS for use as an startup incubator. Photo: Supplied

Another, a three-storey Victorian warehouse at 79-83 Abercrombie Street, offering about 1000 square metres of space in a corner freehold, has just come on to the market with Colliers International. Built in 1875, it once housed J.C. Goodwin & Co, glass importers, bevellers and silverers and has recently been restored into a flexible, creative space.

It hasn’t yet been given a price guide as it is an unusually large offering, says Solomons, who is waiting to hear back from potential buyers before the auction on September 14.

“The interest has already been from across the board, as it has heritage significance and there is so much demand for this type of space, and so little supply,” he says.

Yet Chippendale still has plenty of price growth left, as it’s still comparatively under valued, says Rachel Ge, of Ace Properties, who’s currently selling a 35-square-metre space at 32 Regent Street for an office or retail for about $400,000.