The Forum property at Pacific Highway, St Leonards, now owned by Centuria.St Leonards is emerging from the shadows of its North Sydney and Chatswood rivals as a serious office market contender, agents say.

There has been a significant change with properties being withdrawn and land rezoned for residential development purposes. This has led to a shortage of high-quality office accommodation.

But the rise in the area has not been lost on developers with Altis​ Property paying $169 million in August last year for St Leonards trophy asset Space 207.

Centuria also bought the Forum towers and is also said to have bought the Zenith Tower in Chatswood for about $280 million.

JLL’s Sam Brewer and Ben Jackson last year sold a super-lot of nine homes to Asian investors for $66.6 million.

JLL Research predicts more than 128,000 square metres of space will be withdrawn from the North Shore office market over 2016 to 2019, equal to about 8.7 per cent of the market in this four-year period.

The St Leonards market will account for 30,800sq m of these withdrawals this year alone.

JLL’s head of office leasing, North Sydney, Paul Lynch, said this would increase competition for office space not only in St Leonards but also in neighbouring office markets.

“The displacement of commercial tenants in St Leonards is exerting pressure on the prime and secondary office markets of North Sydney and Chatswood,” Mr Lynch said.

“The Chatswood CBD has no new office developments planned for the short to medium term and there is a limited office development pipeline in North Sydney in the next two years.”

Mr Lynch said the withdrawal of stock and rezoning of land was not unique to St Leonards and was also taking place on the periphery of the North Sydney and Chatswood CBDs.

“This will further limit the number of viable commercial opportunities across the North Shore to the benefit of both prime and secondary office landlords,” he said.

Mr Lynch said residential development and infrastructure improvements across the lower North Shore would have a positive impact on the evolution of the office markets in the medium to long term

JLL’s senior executive office leasing, Jaime Kernaghan​, said the increase in new residential developments in St Leonards would likely attract young professionals to the area due to the increased range of amenities, education and transport options.

“This will benefit the North Sydney and Chatswood office markets by providing a greater catchment of workers, particularly those interested in reducing their daily travel time while still being close to commercial hubs,” Mr Kernaghan said.

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