Norwest Property Market Update 2nd Half of 2020
Positioned approximately 30km north-west of Sydney, Norwest is an area which encapsulates the suburbs of Baulkham Hills, Rouse Hill, Castle Hill, and Bella Vista. These suburbs are noted particularly for their commercial precincts, which include office and retail uses, as well as strata industrial properties.
The median commercial sale price in Norwest was $8,381 per sqm for Q2 2020. This represents half-yearly (Q4 2019 – Q2 2020) price growth of 2.2% and annual (Q2 2019 – Q4 2020) price growth of 17.7%, showing an overall positive trend. COVID-19 seem to have had low impact on the commercial sector in Norwest, with the number of transactions as strong as the year prior (Q1 2019 and Q2 2019), with comparable median pricing.
In contrast, the median price per sqm for industrial properties in Norwest reflected a lower price point of $4,235 per sqm for Q2 2020. This represents half-yearly (Q4 2019 – Q2 2020) price softening of -20.0%, largely due to a strong Q4 2019 result. That said annual (Q2 2019 – Q2 2020) price growth was 0.2%, suggesting overall the market remains steady. Industrial property sales in Norwest remain limited, with just 8 sales occurring in Q2 2020. That said the number of sales and median price have remained stable when compared to Q1 2019 and Q2 2019, indicating that the market has been resilient amidst COVID-19.
Norwest’s median industrial net lease rate was at $219 per sqm as of Q2 2020. This rate signified a slight price growth of 0.5% in the six months since Q4 2019 and a greater price increase of 21.7% in the 12 months since Q2 2019. Leasing activity continues to fluctuate, with 20 leases recorded in Q2 2020.
The median commercial net lease rate for Norwest in Q2 2020 was at $380 per sqm. This represented healthy growth of 9.2% in the six months since Q4 2019 and similar growth of 8.6% in the 12 months since Q2 2019. Leasing activity remained steady over the previous 12 months, with 19 leases recorded in Q2 2020 (compared to 20 in the quarter 12 months prior).
Norwest is set to benefit from an estimated $5.4B of development, scheduled to commence between 2019-2021. There are 129 major projects due to commence, which represents 87.8% of the original development pipeline, with approximately $743.3M (or 12.2%) either deferred or abandoned by developers.