The GPT Group is in talks to snare QBE Insurance Group as an anchor tenant for a planned $250 million office tower in Parramatta as the western Sydney hub gamers more interest among renters.

The insurer, currently housed in the nearby Eclipse Tower, has a requirement of about 15,000sqm and the shift could alter the landscape in Parramatta where a host of developers are vying to win tenants for their projects.

GPT in March won development consent from the City of Parramatta Council to build a 26,000sqm office tower at 32 Smith Street. Designed by renowed architecture firm Fender Katsalidis, the complex will feature a ground-level event space and an elevated podium terrace facing the Parramatta River.

GPT said at the time that there had been a strong level of inquiry from blue-chip occupiers.

The design of 32 Smith Street tower includes widened footpaths, glass lift shafts and facades, which will improve the visual and pedestrian connection to the river. The development is near the Parramatta Transport Interchange and planned $1.2 billion Riverbank cultural precinct.

Real estate agent JLL is handling the leasing on the building but the parties declined to comment. The Property Council of Australia's most recent Office Market Report showed Parramatta was one of the country's best performing office markets.

For the six months to January 2018, the vacancy rate for office space in Parramatta fell from 4.3 per cent to 3 per cent, while A Grade office space was full.

Construction on 32 Smith Street is planned to commence this year with works due for completion in mid-2020.

Rivals including Dexus, Charter Hall, Mirvac and the private Walker Corporation have projects under way and industry sources said more government departments were headed out of the Sydney CBD to Parramatta.

The Australian Taxation Office, currently in the Jesse Street Centre, has been rumoured to be mulling options. NSW FACS in Ashfield is also weighing options.

Westpac is in the market looking for 10,000-12,000sqm of space and NAB has already taken space in Parramatta Square. Telecommunications company Telstra is also looking for 5000-10,000sqm of space.

Colliers International's John McCann said a number of private companies were shifting their back-office operations to the area.

Superannuation group REST Industry Super has put the $275m-plus Eclipse Tower up for sale.

It would likely seek to keep QE, but it already houses services firm Deloitte, which could take more space, or it would be well-placed to win a new tenant.