The expansion of the public service sector, education and the planned airport at Badgery's Creek will give an extra impetus to the Parramatta market, agents say.
This comes as a number of key assets are due to change hands in coming weeks.
Currently there is Charter Hall's sales campaign for its PFA Diversified Property Trust's 110 George Street property in Parramatta, known as The Octagon, with a value of about $85 million. The property is co-owned by Brisbane's Westlawn.
Quintessential is also offering a $90 million portfolio for sale, including 87 Marsden Street, Parramatta.
The area has one of the lowest vacancy rates in the country.
CBRE's Wayne Redman was appointed to sell the residential tower and adjacent commercial towers at the $2 billion Parramatta Square Project and the agent is also selling the Justice Precinct.
Nick Hoskins, the NSW director of research at Knight Frank, said the progression of Parramatta Square in conjunction with the sharp upturn in residential development, which will provide around 7000 new apartments to Parramatta over the next five years, are expected to boost local amenity and provide an attractive option for businesses looking for non-core central business district locations.
"However, with new supply not due to start entering the market until late 2016/early 2017, the prime market is expected to remain considerably tight," Mr Hoskins said.
"This is likely to result in a continuation of relatively firm rental growth, particularly from renewals given a lack of alternative options for sitting tenants."
Parramatta, and other suburban markets are also benefiting from the conversion of offices in the capital cities into apartments.
A new Colliers International report, Competitive Rivalry: Office Versus Residential in Metro Markets, says competition for assets is heating up in most metropolitan markets as increased residential development impacts upon new office supply.
John Marasco, Colliers International managing director of capital markets and investment services, said developers were increasingly buying and developing for residential use land previously earmarked for office development.
"This is increasing competitive pressure on land values across metropolitan office markets, at the same time as demand from investors for office investments continues," Mr Marasco said.
"Metro office is becoming increasingly sought after as it provides attractive yields and in some cases development upside," Mr Marasco said.
"Hot spots such as Parramatta in New South Wales, Fortitude Valley in Queensland and the soon-to-be redeveloped Chadstone commercial precinct in Victoria, are particularly sought-after.
"And while the amount of funds available for investment in property remains high, it is limited by the amount of stock available for sale in the metro markets."
The Colliers report says A Grade stock in Parramatta accounts for 40 per cent of the total market and is extremely tightly held, with the vacancy rate falling by 30 basis points to reach 0.2 per cent at 1 July 2014. The overall vacancy rate increased from 6 per cent to 6.7 per cent in the first half 2014.
