Seven: Living in the City
November 24, 2013 / John Muscat
The recent $17 million sale of a ‘trophy penthouse’ in The Residence, an apartment tower facing Hyde Park, points to some dramatic changes in the city.
Most people still assume Sydney’s rich live in places like Mosman or Vaucluse, on the lower north shore and the eastern suburbs. But increasingly the city is turning into an enclave where the well-heeled don’t just work and socialise, but also live.
Without resorting to that clunky word ‘Manhattanisation’, this is one of four trends sweeping the CBD. Others are the retail core’s rise to international status and mall-style shopping, emergence of an Asian sub-CBD south of Goulburn Street, and conversion of the ‘zone-in-transition’ to office and apartments towers. The last one calls for some explanation.
According to the ‘core-frame model’ of the CBD, as developed by urban geographers, businesses competing for the highest rents, like upmarket retail and professional offices, concentrate in core blocks while more marginal activities are relegated to peripheral blocks. While these outer areas tend to consist of low grade and sometimes dilapidated building stock, their owners have little incentive to upgrade them. They will eventually be sold and demolished for redevelopment, absorbed by the more dynamic and expanding retail and office cores.
Until then they are a zone-in-transition, often run-down and seedy, featuring rows of pawn shops, op-shops, charity stores, second-hand and adult bookshops, R-rated cinemas, warehousing and storage space, tobacconists, ‘massage parlours’, reject shops, bespoke tailors, cobblers, back-packer hostels, shop-front jewellers, ethnic supermarkets and other low rent activities.
Sydney used to have a zone-in-transition straddling the lower reaches of Sussex, George, Pitt and Castlereagh Streets from Haymarket and Railway Square up to Bathurst Street and then shifting west up parts of Sussex and Kent Streets. Now it has all but disappeared, replaced by snazzy office complexes, hotels and luxury apartments along the ‘western corridor’ facing Darling Harbour, and a forest of prestige apartments south of Bathurst Street.
Looming over the skyline, these include Meriton Tower, The Summit and Sun Tower in George Street, Lumiere in Bathurst Street, World Tower, The Waldorf and Radisson in Liverpool Street, Meriton Serviced Apartments, Fraser Suites and Adina in Kent Street, Emporio Apartments, Landmark Apartments, Windsor Plaza and Maestri Towers in Sussex Street, The Shed in Goulburn Street, Quest World Square in Cunningham Street, The Miramar, Hordern Towers, Century Tower, Princeton and another Meriton in Pitt Street, and The Peak in Quay Street (Haymarket). And they come with a price tag befitting their fancy names. For a two-bedroom apartment in World Tower, expect to pay $1,010 a week, more than double Sydney’s median rent of around $420.
The transitional zone used to occupy the space between the core and the inner-city industrial belt, but this residential outcrop has been accompanied by the departure of maritime functions from Darling Harbour, and of light industry from places like Pyrmont, Ultimo, Chippendale, Redfern and Surry Hills.
One of the drivers of this change is a growing desire to live in the city. Sydney Local Government Area, which covers the CBD and surrounding suburbs, has experienced something of a population boom over the last decade, roughly coinciding with Mayor Clover Moore’s time in office. It may surprise some people, considering high rates of settlement in the western suburbs, but Sydney LGA has amongst the largest growing populations in New South Wales. Of the 42 LGAs across Greater Sydney, it ranked seventh for population growth between 2006 and 2011. In 2010-2011, it came in third amongst all 152 New South Wales LGAs for size of growth, behind Blacktown and Parramatta. Statistics show that people moving into Sydney LGA tend to have higher incomes and educational qualifications than the average.
The Mayor is an active promoter of residential construction, warmly embracing the former government’s target of an additional 55,000 dwellings in Sydney LGA by 2035 (the population is forecast to rise by 50 per cent over that time, to 280,964). In part, this reflects her green predilection for a small urban ‘footprint’, reining in Sydney’s peripheral expansion.
But political advantages can’t be ruled out. The Mayor and her team draw support from residents, offering more and better ‘environmental’ amenity. This helps counter the votes of business owners, also enfranchised in council elections, who tend to prefer Liberals or other business-friendly candidates. The proportion of business owners registering to vote has fallen recently.
Presently, the CBD is ringed by some huge residential development projects, of which the Mayor is a vocal champion. Green Square in Alexandria will deliver up to 20,000 new residential units, Central Park in Haymarket and Barangaroo South (both in the old transitional zone) another 3,000 and 800 respectively, and Harold Park near Glebe another 1,250. Just recently, 159 of the apartments planned for Barangaroo were sold out within hours, including one for $10.5 million.
In its latest phase, though, the residentialisation of central Sydney penetrates beyond the ring projects, beyond the transitional zone, right into the CBD’s office and retail cores. Lingering effects of the financial crisis on white collar employment, combined with practices like ‘hot-desking’ which ration the use of workspace, have nudged the office vacancy rate toward 10 per cent. According to real estate firm LandMark White, “the only thing that could save the CBD office market over the next five years will be residential conversions”. Hardest hit are B and C grade buildings without a flashy green rating.
Conversion of office towers for apartments is now a well established trend. The large block at 34 Hunter Street is to be made over for units, as well as the former Packer headquarters in Park Street, the Coca Cola Amatil building and Goldfields House in Circular Quay, office blocks at 227 and 130 Elizabeth Street, and 570 George Street, amongst others. And purpose-built apartments are making an appearance in the CBD core, notably Fife Capital’s 32-storey ‘York & George’ at 383 George Street and the 70-storey Greenland Tower in Pitt Street, billed as ‘Sydney’s tallest residential tower’.
“Residential living is the thing that’s most attractive to developers currently and it’s wonderful to see people living right in the city,” says Mayor Moore in a Sydney Morning Herald report, even while professing support for “financial, legal and business employment”. The report has her explaining that the number of people living in the CBD has risen from 4,767 in 1991 to 22,755 in 2011, and is forecast to reach 34,000 by 2030.