2016-17 Commercial Market Summary

Friday 30 June 2017





The 2016/2017 financial year saw approximately 40 commercial properties sold in Orange (contracts exchanged between arm’s length parties) worth around $30m. The number and value of transactions was down on previous years due to a large extent in a contraction in supply rather than any reduction in demand.

Commercial leasing activity increased albeit larger national and government tenants were notably absent from the market and the majority of transactions were for smaller tenancies. Retail leasing was particularly soft and CBD retail vacancies are at their highest levels in the past 20 years.



2016/2017 Summary

Commercial Investment Property Sales

Strong demand but limited supply (Only 3 sales). Yields fully firm.

Development Site Sales

Increased enquiry/ activity for development site (3 sales). Prices achieved $/m² firm.

Retail Leasing

Reduced demand/activity and increasing CBD retail vacancies.

Office Leasing

Increasing demand/activity and vacancies falling.

Industrial / Service Trades Leasing

Demand for smaller sheds & strata units improving. Overall steady.


The most significant commercial investment property sale was without doubt 257 Anson Street (The Bluestone Hall. The property, leased to Sonic Healthcare Limited sold at auction well above reserve price at a yield of approximately 4.8%. Also reflecting the continued strength of the tightly held Orange market was the sale of a dual tenancy retail property at 239 Summer Street on a yield of approximately 7.5%. Both of these properties were sold by benchmark Commercial.

Two significant CBD development site sales negotiated by Benchmark Commercial were 160 Byng Street (The site occupied by Beaurepairs) and 129 Byng Street (The Carrington Hotel). These properties attracted strong buyer interest and sold at rates ($/m² land area) of approximately $878 and $807 respectively which we regard as fully firm.

Over the course of the financial year Benchmark Commercial negotiated the lease of 57 properties as follows:









Industrial/Service Trades








The most notable trend in leasing demand over the year was in the retail sector. 2016/2017 saw a number of retail businesses close and withdraw from the orange market most notably being Myer. Whilst a number of new smaller leasing transactions were completed there was a decline in demand from national tenants and those that were actively looking at Orange have become increasingly location and price sensitive. As a result we now see retail vacancies in the CBD at a 20 year high with 16 vacant shops (excluding Myer) totalling 2,652 square metres.

The former Myer store is currently being redeveloped to provide some 16 specialty shops and 2 mini major retail premises totalling approximately 5,800 square metres. In the longer term we feel the redevelopment of the Myer space will enhance and revitalise the CBD however there is clearly downward pressure on retail rents.

Office and industrial leasing has strengthened over the year however the majority of transactions have been for smaller sheds and office tenancies. Vacancy rates in both sectors are slowly improving.

Over the financial year there were approximately 9 sales of industrial land in Orange. This is an increase on the longer term average of 7 sales per year. Despite some recent comments in the media that there is a shortage of industrial land in Orange and hence the need rezone land around Orange airport for an Industrial Park. Our listings suggest otherwise.

Benchmark Commercial has 23 industrial serviced industrial allotments listed for sale and 2 en-globo industrial zoned land parcels with potential for a further 89 lots (approximately). On this basis Benchmark Commercials listings alone account for some 112 existing and potential industrial allotments or, based on recent trends, some 16 years demand.  These figures do not include the former Orange Sale Yards in McNeilly Avenue  or  the Electrolux sites which account for in excess of an additional 25 hectares of Industrial zoned land that can be subdivided and developed.

In conclusion, there were some significant developments approved and announcements relating to proposed developments over the past year including the potential relocation of the NSW Department of Primary Industries (DPI) Head Office to an alternative location within Orange, redevelopment of the Myer building, Bloomfield Private Hospital and Medical Precinct on Forest Road and Development Approval for a Quest Serviced apartment complex at 132 Kite Street.

The NSW Government’s brief for the possible relocation of DPI calls for 8,500 square metres of office accommodation and 380 undercover and secure car parking spaces close to the Orange City Centre. We understand there have been 3 tenderers/developers shortlisted with one of those tenderers having secured part of the former Orange Base Hospital site. Whilst the relocation of the DPI would be a significant project by regional standards, and would generate considerable employment during construction, the future of the existing DPI building and its re-leasing prospects are a concern. Given current office leasing demand a conversion to an alternative use may need to be contemplated should this project proceed.

Orange City Council have approved a DA for development of 132 Kite Street with a Quest Serviced Apartment complex comprising some 44 apartments 33 of which are twin keyed 2 bedroom apartments. The developers anticipate the facility will be trading by late 2018.

Finally, Benchmark Commercial has been appointed exclusive leasing agents for Stage One of the Bloomfield Private Hospital Precinct. Stage One is to include 12 shops comprising 1,791 square metres of retail space plus approximately 4,794 square metres of medical and allied health suites.

These proposed developments together with Newcrest Mining’s ongoing Cadia Gold Mine activities and the development of the McPhillamys Gold Mine at Kings Plains by Regis Resources auger well for the future of the Orange economy.



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