Hundreds of millions of dollars in investment in Wollongong's heart will transform the often maligned commercial district and enable the city to achieve regional capital status with a thriving CBD at its centre, backers say.
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In the past month, developers and their agents have announced major projects for the Wollongong CBD, all with multimillion-dollar price tags.
The Globe project will demolish the former David Jones building and carpark, along with the City Diggers club, with in its place a 15-storey, five-star hotel, eight-storey office tower and a combined motel and club on the former City Diggers site.
The Globe is joined by multiple high rise towers between Auburn and Keira streets, the WIN Grand project between Crown and Burelli streets and the recent sale of the former Wollongong Bunnings site which broke the city's record sale price.
Property Council regional director for the Illawarra David White said Wollongong had historically been overshadowed by Sydney when it came to attracting investment, but post-COVID the city had come into its own, and The Globe development was proof of that.
"It's another sign of an influx of capital coming into the CBD to fix up some of those tired old buildings that have existed for a long time," he said.
In fact, Wollongong may be outshining its larger neighbour. Prime office values have dropped by eight per cent in Sydney in the past year, with similar falls in Melbourne.
In Wollongong, demand for A-grade office space has surged, with positive net absorption, meaning more tenants moved in than out in the year, and an additional 11,500 square metres of space was added.
As office tenants moved towards the higher-quality end of the market, in part to entice workers back to the office after working from home, Mr White said there was potential for older office buildings to be redeveloped.
"I think over the next couple of years for the B and C-grade stock, it will call into question what their future use could be," he said.
Read more - The Globe
The jewel in the crown of The Globe will be the 15-storey, 236-room luxury hotel, topped with a sky bar and rooftop pool, the first five-star hotel for Wollongong.
General manager of Destination Wollongong Mark Sleigh has long argued that the city is short of hotel accommodation and said, based on the competition for the licence to operate the five-star hotel in Shell Cove, the city could expect similar interest in the CBD hotel.
"There is certainly demand there and it's something that has never been done in that CBD location," he said.
When the former David Jones building first opened, it signalled Wollongong's maturity from a country town to a major regional centre in the mid-20th century, and Mr Sleigh said this project would do the same for the city in the 21st century.
"Strong economies rely on strong CBDs and I think this project would certainly take our CBD to another level, both from an accommodation perspective, but also a commercial perspective," he said.
The project expects to create more than 1000 full-time jobs and spur $30 million in retail and visitor spending.
While the adjoining Globe Lane has been a bright spot for the CBD in recent years, the adjacent block of Crown Street has been the target of residents' frustration.
The spillover effects of a few hundred visitors plus office workers would have a knock-on effect for nearby businesses, Business Illawarra executive director Adam Zarth said.
"This redevelopment would add much-needed foot traffic to that end of the Crown Street and enliven the mall significantly," he said.
"Nearby businesses in Wollongong Central and beyond will benefit from a host of new customers as visitors to our city staying at the proposed hotel venture out to experience everything the Wollongong CBD has to offer."
With a development application awaiting public exhibition, there remains a way to go for The Globe before guests can check in and workers gather around desks, but when complete, would form part of the spine of the CBD, stretching from the redeveloped Wollongong Hospital to the Illawarra Sports and Entertainment Precinct.
Mr White said with major developments on the horizon governments would need to look closely at transport and public space in between.
"You could have them all done in 10 years, if everything lines up," he said. "It's going to ask some questions about the CBD and its access and urban design appearance."
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