Increased demand for office space in the central business districts of Sydney and Melbourne has resulted in declining vacancy rates and increased rents in those cities, and as a result commercial properties in regional centres are becoming more and more valuable.
New South Wales’ third biggest city and less than 100 kilometres from the Sydney CBD, Wollongong in particular is starting to see investment increase in its commercial premises.
“Increasingly we are seeing very strong interest from CBD buyers, particularly Melbourne and Sydney, to Wollongong,” Travis Machan from MMJ Real Estate Wollongong said.
“The attraction is greater affordability without compromising on the fundamentals of their investment,” Machan said.
Commercial premises in the city could become even more valuable in the coming years, with the Property Council of Australia’s Wollongong City on the Move report predicting the city will continue to grow as the Illawarra’s business centre.
Currently Wollongong generates 63% of the Illawarra’s Gross Regional Product (GRP), and this projected to grow to between $14 and $16 billion by 2022.
The Wollongong CBD is earmarked to accommodate a minimum 10,000 new jobs and 6,000 more residents by 2031.
“These are the fundamentals giving confidence to investors in this market. We recently sold a large commercial building of around 5170 square metres at 67-71 King Street, Warrawong, bought by a consortium comprising local and Sydney investors for just under $8 million,” Machan said
“The sale of buildings this size and this price are indicative of the shift we are seeing. Without a doubt, this region is set to become a real contender as a prime business hub in the coming years.
“There has been a significant surge of activity with true A-grade office leases being taken up in Wollongong. The significant increase in mixed use developments offering broader retail and commercial opportunities with quality facilities for their occupiers has been very positive.
“Wollongong is on the radar for many buyers, and recent significant infrastructure developments within the city will only cement its place there. It’s the city to watch as we increasingly follow this real shift in commercial office investing.”
