The surge of new developments in Sydney’s west has pushed the Parramatta office vacancy rate to a record high of 23.4 per cent, at a time when the area is preparing for the impact of the city’s second airport.

Once, the precinct boasted a near-zero level but with six major towers opened or under construction, including billionaire Lang Walker’s Parramatta Square project, the vacancy rate has blown out. It was 18.1 per cent six months ago, according to the latest Property Council of Australia’s Office Market Report.

Fuelling the rise is that many of the towers have been leased by federal and state government tenants, many of whom still work from home most of the week.

Sydney’s west is the home to the new airport at Badgerys Creek, an area that has already boosted the land values for industrial property and expectations are that aligned aviation businesses will look to lease office space over time at Parramatta.

As with the rest of the major office markets, where possible, companies are taking advantage of vacant space in the premium properties, leaving the B and C graded assets struggling.

The report, to the end of July, found that Parramatta’s A-grade office space experienced an increase in net absorption or leasing, of 9739 square metres, meaning more tenants were moving into these assets than leaving, while the B-grade figures were in the reverse direction, with a negative net absorption of 39,061 square metres.

Vacancy among this level of towers has increased from 22.8 per cent to an unprecedented 41.3 per cent.

“The good news is that our newer A-grade stock is continuing to fill-up,” Property Council’s Western Sydney regional director Ross Grove said.

“The challenge for Parramatta is its change in B-grade vacancy rate, it’s a great opportunity for up-and-coming local enterprises to consider how and where they wish to expand.”