When people talk about commercial property on the edges of the Sydney CBD, you’ll often hear the same suburbs mentioned over and over again: Surry Hills, Redfern, Chippendale, Camperdown, Pyrmont and parts of the Inner West. These areas have long been known for their character buildings, creative communities and café-lined streets. But what really makes a good commercial investment in these fringe suburbs? And why do some assets in these pockets continue performing strongly when market conditions shift?
The short answer is stability.
Stability isn’t something you can simply add to a listing; it comes from understanding the types of businesses that succeed in fringe locations and the way tenants’ needs are evolving.
Recently, we’ve seen a great deal of commentary about the ‘flight to quality’ in office markets, with larger firms consolidating back into premium towers in the CBD. This trend is very real. Big organisations want to attract and retain talent: premium office buildings with their hotel-style lobbies, wellness facilities, concierge services and proximity to major transport can be a powerful drawcard. For many corporations, upgrading to the CBD ticks the boxes of amenity, accessibility and prestige.
While the CBD strengthens its appeal to larger firms, the fringe hasn’t been left behind. Instead, it has leaned into its strengths: authenticity, creativity and vibrancy. These neighbourhoods offer something the CBD simply can’t replicate at scale: a more character-driven working environment with a genuine connection to the street.
Rather than diluting demand, the CBD’s pull has sharpened the fringe’s identity. The types of tenants who choose fringe suburbs are often intentionally doing so because the area reflects their culture and brand.
Fring suburbs haven’t been left behind; in many ways they’ve simply leaned into what they’ve always done best. The result is an ecosystem of varied, resilient tenants who are often more stable than they appear at first glance.
Fringe suburbs are supported by an eclectic yet surprisingly stable collection of businesses. Essential services are at the top of this list. Medical practitioners, allied health providers, neighbourhood pharmacies and everyday convenience retail continue to perform well regardless of economic mood. People need these services daily and suburbs with strong residential density provide them with consistent foot traffic.
Food and beverage operators also play a key role. While hospitality can be a volatile category, well-run cafés, bakeries and casual restaurants in local hubs enjoy strong, repeat customer bases. When a business becomes part of the neighbourhood’s daily rhythm—morning coffee, lunch breaks, last-minute takeaway—it becomes an anchor.
Then there are the creative and boutique professional firms that shape the cultural identity of suburbs like Surry Hills and Chippendale. Architects, design studios, production companies, small tech teams and digital agencies often prefer workplaces that feel distinctive, not corporate. Converted warehouses, old terraces and quirky industrial spaces give them exactly that. These spaces aren’t just offices; they’re working environments that support a company’s brand identity. It’s far easier to feel innovative in a warehouse with exposed beams than in a corporate tower with identical floors from top to bottom.
These are the kinds of tenants (many of them family-owned and -run businesses) that keep commercial strips alive and keep investors’ cash flow steady.
One of the biggest advantages fringe suburbs have over the CBD is the opportunity for adaptive reuse. While premium towers in the city deliver sleek amenities, fringe buildings deliver charm, flexibility and authenticity. Investors who understand the value of adaptive reuse – repurposing older buildings to meet modern needs – have been rewarded.
An old factory can become a co-working hub. A warehouse can be reimagined into a studio, office or hybrid space with breakout areas and end-of-trip facilities. An old parking station can (and has) become a studio for architects. A shopfront can be refreshed for retail on the ground floor with a boutique professional suite upstairs.
Adaptive reuse doesn’t just preserve architectural character; it also creates the kind of spaces today’s workers actually want to spend time in.
Importantly, many fringe suburbs sit along major transport routes. Redfern and Central stations connect workers across the Sydney network, while arterial corridors such as Parramatta Road, Cleveland Street and the Anzac Bridge provide excellent accessibility for clients and customers. You don’t need a CBD address to be well-connected.
A strong commercial asset on the city fringe is rarely about just one thing. It’s about a combination of dependable tenant demand, location appeal, the adaptability of the building and the potential uplift that comes with thoughtful refurbishment. It’s about buying in areas where businesses want to be, not because they have to, but because the lifestyle and streetscape match their culture.
Yes, the corporate world may be drifting back towards premium CBD spaces, but the fringe is holding its ground by offering something entirely different: community, character and creativity; those qualities continue to attract tenants who value long-term stability.
For investors looking for commercial opportunities that perform reliably, the Sydney fringe remains one of the most compelling markets. Its strength lies not in mirroring the CBD, but in offering a vibrant alternative that tenants genuinely value and that can preserve investor cash flow.
As always, when considering an investment in property, you should take into account your financial circumstances and seek advice from your financial adviser before acting.
As dedicated local commercial real estate agents, we can help you extract more value from your commercial property. Please get in touch to discuss your circumstances and assets so we can give you personalised advice. Whether it’s commercial leasing, management or sales, we’re here to help you with your Sydney-based commercial property.
Contact us at Ray White Commercial Sydney City Fringe
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