As the regional capital of the Illawarra Shoalhaven, we are continuing to see Wollongong CBD prove its worth as a strong contributor to the property sector - not only in the Six Cities Region, but in the state at large.
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This was confirmed by figures from the latest Property Council Office Market Report, which is released twice yearly.
From this report, it emerged that Wollongong now has the second lowest office vacancy rate of all markets in NSW.
Not only this, but we are going from strength to strength.
The vacancy rate within Wollongong CBD has decreased from 19.9 to 14.7 per cent in the six months to January 2024.
We are now ranked third in terms of national non-CBD net demand.
It is no longer a question whether businesses see the benefits and value of Wollongong CBD, it is a quantifiable fact.
No doubt this is in part due to the access we have to high-quality education providers (hat tip to University of Wollongong), exceptional lifestyle options, and the opportunities provided by the redevelopment of Port Kembla as a key international gateway right on Wollongong's doorstep.
Supply to stay strong
Our report predicts that supply will remain strong, with 3000 square metres of office space predicted to come online in 2024 and a further 9181 square metres from 2025.
This is evidenced with new commercial space currently being delivered at 111 Crown (Stage 2 of Langs Corner) as well as the 76 Crown Street (Downtown Motel) site, the 82 Market Street site and the WIN Grand site.
All of these projects have approval, although construction has yet to commence.
Each represents further confidence in Wollongong as a key commercial centre, and the potential to attract talent with the type of well-equipped, premium office space so coveted by a modern workforce.
Going forward, proposed major projects in the Illawarra region - including regional transport, clean energy, defence and port-related uses - could further the demand for vibrant commercial precincts.
Same goes for the expansion of Wollongong Public and Wollongong Private hospitals, as well as Illawarra Sports and Entertainment, and the healthy growth these projects represent.
There is a lot of positive news here.
But let's not forget, there are still challenges standing in the way of our full potential.
Among these will be access to talent, which is presently constrained by the housing affordability and rental crisis facing the region.
Recognising that the State Government has a renewed focus on housing supply in established areas, such as residential land near key rail stations in the Illawarra region, the success of this policy will be closely aligned to further commercial growth in the CBD.
With so much regional investment across so many sectors, including with the ongoing apartment growth and greenfield housing development at West Lake Illawarra, the future looks bright for our region.
Wollongong remains a very car-dominated city, and facilitating this preference requires investment in adequate car parking and proper service delivery in the CBD.
Access issues will need to be addressed going forward - and this will largely be the work of the Wollongong Integrated Transport Strategy and Wollongong Centre Access and Place Plan, which are due to be released in early 2024.
As with anything, a balanced approach will be needed; one that provides for the full diversity of CBD users, with their healthy spectrum of preferences.
Our Office Market Report has identified that vacancy rates for C- and D-grade buildings - generally comprised of those buildings with smaller floor plates, lower energy efficiency and ageing designs - have risen.
This is telling a story that good building quality with high amenity remains a key driver for local demand.
And while owners of this secondary office stock will have some difficult questions to answer about the future of their assets, there is also opportunity here.
For example, the potential to convert this stock into residential, and subsequently play a role in alleviating our housing crisis.
This is an issue I anticipate arising when Wollongong City Council commences their review of the city planning framework, once the Access and Movement Strategy is finalised this year.
With so much regional investment across so many sectors, including with the ongoing apartment growth and greenfield housing development at West Lake Illawarra, the future looks bright for our region.
The Property Council will continue to work with State and Local Government, on behalf of our industry, to achieve the best possible outcome for this vibrant region, and to advocate for its full potential for both present and future populations.
- David White is Property Council of Australia Illawarra Regional Director
