Thursday 6 February 2025
MEDIA RELEASE
Wollongong office market faces challenges amid rising vacancy
The Wollongong office market recorded a modest increase in vacancy rates over the year to January 2025, reflecting subdued tenant demand and challenges across most market segments.
According to the latest Property Council of Australia Office Market Report, total vacancy rose to 15.2per cent, up from 14.7 per cent a year earlier.
Property Council NSW Deputy Executive Director Anita Hugo said while Wollongong has the potential to become a more dynamic commercial hub, the figures indicate the need for targeted investment and collaboration to strengthen the market.
“Wollongong’s vacancy rate increased slightly over the past year, with all grades of office space facing challenges, except for D-grade stock, which recorded a small improvement,” Ms Hugo said.
“This highlights the need to continue modernising Wollongong’s commercial spaces to attract tenants and meet evolving market expectations. While A-grade spaces saw minimal change, demand for B-grade, C-grade and older stock remained weak, pointing to the ongoing importance of investment in quality and functionality.”
Key insights for Wollongong from the January 2025 Office Market Report:
- Total vacancy increased from 14.7 per cent to 15.2 per cent, driven by -3,346 sqm of net absorption (total space leased minus the space vacated over the period), with 2,720 sqm of withdrawals over the year
- A-grade vacancy remained stable at 17.1 per cent, with minimal net absorption recorded
- B-grade vacancy increased from 3.1 per cent to 5.1 er cent, with -904 sqm of net absorption
- C-grade vacancy rose from 21 per cent to 22.3 per cent, reflecting -2,670 sqm of net absorption
- D-grade vacancy showed improvement, decreasing from 18.1 per cent to 13.3 per cent, with 223 sqm of positive absorption
- Future supply includes 1,500 sqm of office space expected in 2025, followed by 8,500 sqm in 2026, highlighting continued development activity in the region.
Ms Hugo emphasised the importance of addressing challenges through coordinated efforts between developers, tenants and government stakeholders.
“Wollongong has all the ingredients to become a thriving commercial hub—proximity to Sydney, excellent lifestyle appeal and a strong local community. However, unlocking this potential requires a focus on creating attractive, high-quality workspaces and ensuring the city remains competitive as a destination for businesses.”
Ms Hugo said that revitalising older stock and addressing tenant expectations for sustainability and amenities would be critical to boosting the market’s performance.
“Investing in the right areas now will pay dividends for Wollongong’s future as a vibrant and resilient commercial centre,” Ms Hugo said.
The Property Council of Australia Office Market Report is released twice a year, providing detailed analysis of office market performance across Australia. For more information, visit: [www.propertycouncil.com.au/news-research/research/office-market-report]www.propertycouncil.com.au/news-research/research/office-market-report.
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Media: Andrew Parkinson | 0404 615 596 | [email protected]