Investors have earmarked Parramatta as the central hub for funds in the coming year, with major infrastructure and property sales in the pipeline.
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Considered the "jewel" of the west, the city is Sydney's 'second CBD'.
More than 13 major sales have been transacted in the past 11 months, with the latest being the sale of the Justice Precinct at 160 Marsden and 4 George Streets. It was speculated the private group, Eureka Funds Management paid $170 million for the two properties to the NSW Government.
Under the deal, the NSW Government will retain a lease of about 15 years.
According to agents, the area has one of the lowest vacancy rates in the country and will be the main beneficiary of the expansion programs by the government.
The area will also be the hub for commercial and residential development when Sydney's second airport is developed at Badgerys Creek.
One deal was the University of Western Sydney, which has pre-committed to 27,000 square metres of office space in Parramatta Square at 169 Macquarie Street. KPMG is set to reopen an office in the area after 10 years, taking an initial 940 sqm at 91 Phillip Street, with indications that they will look to expand.
Raffles College of Design and Commerce is also set to occupy 5,000 sqm at 1 Fitzwilliam Street.
JLL's director of leasing for Parramatta, William Tong, said the Parramatta leasing market has remained stable across the third quarter of this year. Demand from the finance and insurance sectors has slowed, however it is balanced by the increase in demand from the education sector and business services.
Mr Tong said 2014 was one of the busiest on record for the area, and while he predicted another hectic 12 months, supply was tight.
The area is also supported by the growth of the nearby Macquarie Park and North Ryde districts, as well as the industrial parks in the south west and booming residential developments to the west.
"The University of Western Sydney's new campus will be opened in 2017. This signifies the largest pre-commitment in Parramatta since Sydney Water in 2009, who took 23,000 square metres," Mr Tong said."
"The education sector is a major driver of demand in the Parramatta area. Many more tertiary education providers are seeking to establish campuses in the Parramatta CBD. Business services in the sub-500 sqm market are also currently active, with many seeking expansion space," he said.
One was by Laing+Simmons, which sold three shops in one line in the heart of Parramatta CBD for $3.35 million, all but doubling the property's reserve price of $1.7 million. A private investor purchased the retail asset on an unprecedented net yield of 1.8 per cent.
The fully-leased three retail shop property is located at 398-402 Church Street in Parramatta and was offered for sale for the first time in more than 40 years.
It occupies a site area of 505 sqm and was sold by Laing+Simmons Parramatta commercial sales & leasing manager Joseph Assaf.
According to Mr Tong, there are other areas of Sydney which are growing into CBD hubs such as Macquarie Park, however Parramatta remains Sydney's second CBD. "Parramatta services the population of the entire Greater Western Sydney area for residential, business and education needs."
Mr Tong said population and infrastructure have contributed to Parramatta's growth.
"More than half the population of Sydney lives west of Parramatta. The area's CBD taps into the entire market, being easily accessible for the Greater West region via car or public transport," he said.
"The area has all of the main transport systems – trains, buses, ferries, the M4 and soon a light rail. In addition the WestConnex and North West Rail Link connects with Parramatta, making the area extremely significant.
