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A majority of commercial property owners believe the $800 million first stage of the light rail line being built on their doorsteps will significantly increase the value of their holdings.
Some 53 per cent of owners believed it would ultimately improve the value of their assets, with 37 per cent saying it would have little to no impact and only 10 per cent indicated that it would be detrimental to values.
These were the finding of an ACT Light Rail Survey conducted by Colliers International Canberra to address what it believed had been limited interaction or reporting from a commercial owners’ perspective.
Chief executive Paul Powderly said the perspective of commercial property owners – particularly of standalone assets – was vital given the role they would play in the long-term success of the Northbourne Avenue corridor.
“Two key questions we asked was whether they thought the light rail project would ultimately benefit Canberra, and whether it would benefit commercial property values and tenant retention along the corridor,” he said.
There are some 105 commercial properties (including strata) along the Northbourne Avenue corridor and Flemington Road, owned by an estimated 93 groups.
Mr Powderly said the response from these owners seemed to support the notion that further amenity and infrastructure along the corridor would have a positive benefit for owners.
“Potential benefits they perceived included improved tenant retention, increased accessibility for owners and tenants and a solution to the current parking issues, particularly in areas such as Braddon,” he said.
JLL managing director Andrew Balzanelli said commercial properties located within the light rail corridor could benefit from an uplift in values as the infrastructure would lead to increased demand for office accommodation that had a good transport connection.
But he did offer a caveat.
“However, value and rental uplift could diminish if the volume of opportunities ever begin to outweigh the level of demand for commercial office accommodation,” he said.
CBRE managing director Michael Heather said he believed the light rail project would act as a catalyst for commercial property owners to think more deeply about their assets.
“It will prompt current owners of commercial properties to start to consider redevelopment of residential or mixed-use complexes and those that incorporate residential and hotel/serviced apartments,” he said.
“The emerging asset class of build-to-rent will also be well suited to the Northbourne Avenue corridor and the new public transport that it will offer residents.”
The overall vacancy rate for commercial office accommodation in Canberra was 13.5 per cent as at July 1.
Colliers International has accepted its own findings on the benefits of the light rail corridor and committed to a tenancy in the new Civic Quarter (CQ) building in the heart of the Canberra CBD that’s due to be completed by December 2019.
The light rail city terminus will literally be on its doorstep.
“That’s going to be tremendous advantage for many of our staff,” Mr Powderly said.
“Those who live in Gungahlin or along the light rail route will be able to leave their cars at home and walk straight into the building.”
He said there were other advantages that had persuaded them to move from their New Acton premises.
The 12-storey building, bordered by Northbourne Avenue and Mort Street, is set to become the first in the ACT to win a sought-after WELL rating.
“A WELL rating measures seven categories including air, water, nourishment, light, fitness, comfort and mind,” he said.
“The concept is that the building should be able to adapt to the needs of its inhabitants rather than the other way around.
“The design of a workplace affects productivity and a WELL-rated building provides an environment that aims to enhance a feeling of well-being.”
Transport is the key
The DKSN precinct will be Canberra’s first intermodel precinct.
Transport connectivity will be at the heart of the new $160 million DSKN precinct that has just received the green light for stage 1.
Burgess Rawson managing director Guy Randell said the development on the site of the former motor vehicle registry was set to reinvent Dickson and position it as Canberra’s first “intermodal” precinct.
“Basically, it will become a hub for light rail, bus and park-and-ride commuters – it has been designed to align all transport needs,” Mr Randell said.
“Suburban buses will pass through the interchange allowing commuters to connect with light rail to the city. Dickson is set to become an important enabler in Canberra’s transport network.”
Mr Randell said that upon completion some 1700 workers would flow into the DKSN precinct on a daily basis while new apartments would become home to some 500 residents.
“There will be some 300 apartments, along with a wide range of retail businesses and professional service offices, a childcare centre, gym, substantial vehicle parking and a central plaza,” he said.
“There’s going to be demand from businesses to stake a place in DKSN and there’s no doubt that transport connectivity will lead to an increase in property values.”
This article first appeared on www.commercialrealestate.com.au
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