The revamp of Sydney's north shore commercial sector involves more than $2 billion worth of investment developments that are in the pipeline over the next few years.
This has been prompted by office towers under construction or approved, including the new home of the Nine Network as the anchor for the Winten Property Group's landmark 1 Denison Street office tower, which is scheduled to be completed in early 2020.
There is also the demolition of properties for the Metro rail system, which has led to a drop in vacancy in the area.
A private investor has taken advantage of the changing nature of the area by paying in excess of $16 million for a site in Willoughby Road on a sub 5 per cent yield.
The 1712 square metre building sits on a 1019sq m site at 168 Willoughby Road in Crows Nest and has ground-floor accommodation for two retail tenancies, occupied by Top 3 by Design and The Comfort Shop .
The creative space on the first floor is leased by GuihenJones. The property is zoned B4 Mixed Use and there is an opportunity to create a mixed-use development, subject to North Sydney Council's approval.
According to Robert Lowe and Eddie Petro of Savills who negotiated the sale, the planned infrastructure spend in the area is driving investment demand as Crows Nest continues to attract strong inquiries from investors and developers seeking to capitalise on consolidating commercial stock.
"With large site amalgamations along the Pacific Highway, Christie Street, Chandos Street, Atchison Street and surrounds, the resulting outcomes are becoming increasingly accommodative to residential/mixed use opportunities within the precinct," Mr Lowe said.
Sydney Metro Northwest is the first stage of Australia's first fully automated rail system. Due for completion in 2019, at a cost in excess of $8 billion, it will deliver eight new railway stations to a region that will grow faster than any other part of the Sydney metropolitan area.
"In addition to the existing St Leonards train station, the Crows Nest/St Leonards market is further set to directly benefit from stage one via the delivery of a train station along Pacific Highway and Clarke Street, just 380 metres from 168 Willoughby Road," Mr Lowe said.
The property is also close to Sydney's arterial road network, including the Pacific Highway and the M2 Motorway, which is undergoing a $550 million upgrade.
Mr Petro said vacancy rates have been falling across Sydney's main suburban markets and the north shore office markets have a vacancy factor of 7.2 per cent. Crows Nest/St Leonards has a vacancy factor of 8.3 per cent.
"Both of these reflect the lowest vacancy factors achieved in these markets since 2001" Mr Petro said.