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State Street, JP Morgan, Pre-Commit to New Sydney CBD Offices

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Written by Marc Pallisco   
Tuesday, 09 February 2010 18:22

TWO major corporates have signed major new leases in Sydney, signalling a shift in sentiment to the CBD office market.

Investment bank JP Morgan will be the anchor tenant for a new building at 85 Castlereagh Street, due for completion in 2012. JP Morgan will take 16,700 square metres of the new tower, to be developed by Westfield over its its Sydney City development.

Investment manager State Street ha also committed to new offices, agreeing to a 10-year lease at Fortius Fund Management's $400 million George Street building, due for completion in September. Lend Lease managed Australian Prime Property Fund is also developing that building.
State Street will relocate from two office locations including the uber luxurious Aurora Place, and 383 Pitt Street by the end of this year, the AFR reports.

It will occupy levels 10 to 17 of the new building, paying an approximate $650 per square metre to occupy its 800 employees. Incentives (which can include rent free periods, or a contribution to fit-out costs) are around 30 per cent. State Street has the option to lease two further floors in the new building. Jones Lang LaSalle negotiated this lease.

JP Morgan meanwhile will relocate from Grosvenor lace and 259 George Street. It is speculated to be paying about $800 per square metre, with incentives at about 25 per cent. Colliers International and DTZ acted for Westfield, while Grant Samuel acted for JP Morgan.

Fortius chief executive Ray Sproats expects the deals to increase leasing momentum in the Sydney CBD.

"I have been in this leasing market long enough to know when the sentiment has turned. The sentiment has turned."