The Wollongong office market has outperformed all bar one office market in Australia, including major hubs such as the Sydney CBD and Parramatta, according to new figures from the Property Council.
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Only East Melbourne had a greater drop in vacancy than Wollongong in the six months to January 2024, showcasing the ongoing demand for office space in the regional market, Property Council Illawarra regional director David White said.
"Businesses are continuing to see the benefits of Wollongong CBD, with its access to high-quality education, exceptional lifestyle, and the opportunities provided by the redevelopment of Port Kembla," he said.
Last year, Wollongong law firm Morrisons was looking to expand from its cottage office on Church Street as the business grew.
Partner Matt Ward said the firm had particular requirements, and ultimately settled on a lease at the recently renovated office tower at 83-85 Market Street, which was completed in April 2022.
"We needed somewhere close enough to court, that had the amount of space that we wanted, with a fit out that we could do in the bespoke way that we've done," he said.
Despite the addition of 1750 square metres of office space in the year to January 2024, vacancy decreased from 17.9 per cent to 14.7 per cent in the same period.
Demand was strongest for A and B grade offices, while vacancy rates rose for C and D grades spaces.
The tightest market was in B grade offices, where vacancy rates fell to 3.1 per cent, as businesses looked for value in office upgrades.
"While there are challenges with older commercial stock (C and D Grade buildings) which have seen vacancy rates rise over the last year, the vacancy rate among A and B Grade buildings declined," Mr White said. "This is again telling a story that building quality with high amenity remains a key driver of local demand."
Mr Ward said in addition to the benefits of the Market Street location, the firm was looking for a site that matched the work habits of their staff.
"Everyone works really hard and spends a lot of hours in the office, and we wanted to make it a really nice place both to come to work, but also an efficient place for them."
The access to a garden on the first floor, high quality amenities as well step free access for clients who may have mobility issues and large conference rooms were all part of what sealed the deal.
Net demand in Wollongong was the third highest of any non-CBD centre in the six months to January 2024, with absorption - the amount of space occupied minus the amount vacated - at 7,163 square metres.
"This affirms its steadfast popularity as an alternative commercial centre; a place where people increasingly want to live and work," Mr White said.
A number of office projects are expected to add significantly more A grade office space to Wollongong's CBD in the coming years. Immediately to the west of the recently completed Lang's Corner, two new towers will add tens of thousands of square metres of prime office space, as will WIN Grand and The Globe, further up Crown Street.
With these developments and consistent demand for office space in Wollongong, the centre is expected to continue to attract local businesses to the CBD while also providing an attractive location for capital city enterprises.
"We are reminded that the region is a key player not only in the Illawarra, but in NSW more broadly," Mr White said.
"With the continued support of industry and investment from government, we will see the potential of this region grow even further, while giving residents of the Illawarra Shoalhaven even more opportunities to live and work closer to home."
