GPT Group is close to starting work on a new $300 million-plus tower in Parramatta after securing a major leasing precommitment from QBE. The move rounds out a play by the listed group that is separately in due diligence to buy the nearby Eclipse Tower, where QBE is housed, for about $270m.

GPT has been ramping up its exposure to Sydney's western suburbs with developments also under way at Sydney Olympic Park and is expanding its industrial division in Sydney's west.

The Australia revealed last month that GPT was in talks to snare QBE as an anchor tenant for its new premium office tower. The insurer has a requirement of about 15,000sqm and its shift could free up space for existing tenant Deloitte in the Eclipse Tower. GPT declined to identify its new signing, saying only that it had agreed to terms with a precommitment tenant for its planned 26,000sqm office tower at 32 Smith Street.

QBE said last month it was "reviewing" its western Sydney property strategy and was exploring "a number of options". It declined to comment further.

Once signed, the lease will see the tenant commit to 13,600sqm, or 51 per cent of the Fender Katsalidis-designed building's net lettable area, paving the way for construction to commence on the tower.

GPT's head of office and logistics Matthew Faddy said demolition works had already begun on the site, with completion for the development targeted by late 2020.

"We are delighted to be close to signing a precommitment tenant for 32 Smith Street, which will pave the way for construction to get under way on what will be one of Parramatta's iconic landmarks," Mr Faddy said. "This project will add further momentum to the transformation of Parramatta into a world-class business and cultural district."

At a recent event, PropertyNSW flagged that more government departments were headed west - a move that will suit developers including Lang Walker, Dexus, Charter Hall and event shopping centre giant the Scentre Group.

Mr Faddy said the Parramatta office market would continue to benefit from the significant population growth and record infrastructure investment in western Sydney. "Parramatta, which has one of the lowest vacancy rates for any office market in Australia, is expected to see continued strong demand for quality office space from a diverse range of tenants," he said.

The Berejiklian government's plans for new light rail, metro rail and motorway connections into Parramatta are tipped to provide another incentive for businesses to shift to the area.