Wollongong's CBD, industrial lands tell of two different cities

On the one side there is the industrial and large commercial sector, where there is not enough land to satisfy the cravings of major tenants.

On the other, there is small-scale retail in the Wollongong CBD, with some shop-fronts on the main street of the city sitting vacant for up to 12 months.

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Harry Stefanou sees both sides of this city, as principal at WHK Commercial Property.

Speaking at a commercial property market update, Mr Stefanou said not a day goes by where he isn't asked about the supply of industrial land.

"Every day from 90 per cent of my clients, 'We need more industrial land,'" he said.

But, on the phone to the Mercury, Mr Stefanou said there's another conversation going on as well.

"Commercial [real estate] in the CBD is tough, it's a tough market."

Bringing together these two cities to work as one economic unit will be a challenge for the city, particularly as the city continues to grow and expand.

In the latest count of empty shops along Wollongong's "high street" - Crown Street from Corrimal Street to the train line, the ratio of open to closed shopfronts had improved, but stretches of 'for lease' or boarded-up windows remained.

In 2021, one in four shop fronts were vacant, in 2023, the ratio had lifted to one in five. The worst strip was between Keira Street and the train line, where roughly one in four shop fronts were empty, either waiting to be redeveloped as part of WIN Grand or hopeful of a new tenant moving in.

The most vibrant stretch of the strip was between Church and Keira streets, where of 25 shopfronts only two were closed, however this was dominated by the vacant former David Jones site which occupies a large proportion of the southern side of the street.

Other segments of the main drag indicated a city in transition, with shopfronts between Church and Kembla street vacant awaiting the construction of new office towers and the turnover of businesses in lower Crown Street between Kembla in Corrimal street as part of the street's growth as a food and night-life hub.

Mr Stefanou, who manages many of these properties, said the commercial core of the CBD had been diluted by new developments on the edge of the city.

"Shop-top housing, we don't need that," he said. "It's taking the demographics out of the CBD, we are seeing Kenny Street, [Atchison] Street, they've got these little pockets of commercial on the first and second floor."

Above the street level, however, and it's a different story. Mark Grimson, economic development manager for Wollongong City Council said the city had seen $1.9 billion of new investment, including 30,000 square metres of A-grade office space, bring businesses that were previously located on the edge of Wollongong into the CBD.

The latest mover is NAB, which is relocating its business banking team from Fairy Meadow to Market Street in Wollongong. The move involves nearly 40 staff and will take up an entire floor of an office building.

"This relocation and investment into this Centre helps us serve our customers better with an improved location, as well as incorporating new workplace design standards for our colleagues," a NAB spokesperson said. "This project is the latest in our transformation program in modernising our branch and business banking locations."

Heading south, in the industrial lands surrounding Port Kembla, a massive pipeline of investment is looking for land to locate itself.

According to Nigel McKinnon, Wollongong-based deputy director at the department of Regional NSW, there is a pipeline of $700 million in major electricity projects alone for Port Kembla, without including other industrial projects such as BlueScope's blast furnace reline and offshore wind turbines.

At present, however, the two cities are operating separate from one another, Mr Stefanou said, at least when it came to real estate, and the challenge would be to position the CBD as the hub for professional services to service the major industrial developments.

"There are two completely different markets," he said. "These developments in industry are hoping to bring families from the outer suburbs and use the CBD for commercial services and retail."

With the interest rate pain that buffeted the retail sector likely to ease with only one more interest rate rise ahead, according to head of property strategy and research at CBA, Kevin Stanley, there may be the conditions to bring the two cities back together.

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