JLL Director of Office Leasing Western Sydney Ben Lalic said, “Prior to COVID-19, spec suites did not exist in the Western Sydney office leasing market. Now it has almost become paramount for landlords to offer fit-outs that can cater and be ready for a plethora of different companies across various industries.”

The increasing demand for spec fit-outs in the sub-500 sqm range in Western Sydney is seeing landlords begin to reposition their office space with spec fit-outs.

JLL notes that as a result of the COVID-19 pandemic, spec fit-outs have become increasingly attractive among small to medium businesses who are looking to reduce costs and make the most of attractive incentives currently on offer. A ‘plug-and-play’ solution appeals to these businesses who may not have the ability to provide the upfront capital required for a new office fit-out or the resources to project manage its design and construction.

The vacancy rate for the Parramatta office market is sitting at 15.2% as of Q1 2021 according to JLL Research. The addition of new developments to this market has placed pressure on landlords to create spaces that appeal to tenants who now have more choices in the market.

JLL’s Director of Office Leasing- Western Sydney, Ben Lalic said, “Prior to COVID-19, spec suites did not exist in the Western Sydney office leasing market. Now it has almost become paramount for landlords to offer fit-outs that can cater and be ready for a plethora of different companies across various industries.”

“The spec fit-out activity has been high for tenants seeking sub-500 sqm space as we are witnessing businesses of small to medium sized businesses holding more confidence in their overall staff numbers.”

“A spec fit-out can provide the tenant with flexibility. For example, the open plan workspace can be changed to allow for more, or fewer workstations. That can mean it’s easier for a business to adapt their office space to the number of staff they have at any one time,” Mr Lalic said.

JLL recently brokered 265 sqm of space in 111 Philip Street, Parramatta for Suite 8.01 at a rate of approximately $550, which included a spec fit-out. At the same time, they have agreed terms with another tenant for 383sqm at Suite 8.04 which also offers a spec fit-out. 9 George Street is another example of an office building that has recently undergone refurbishment to reposition the asset.

“While 9 George Street is classified as B-Grade, the new lobby and spec fit-outs present as a modern A-Grade asset so, there are real opportunities for landlords to increase value by offering spec fit-outs,” Mr Lalic concluded.  

 

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