With 17,000 sqm of office stock coming online in 2020, large tenants are turning their attentions to Australia’s best kept secret: Wollongong. Find out why.
Wollongong is at an “unusual point” in its history, says MMJ Real Estate’s Michael Croghan.
While the city’s office vacancy has fallen to its lowest level in seven years, three of the largest commercial developments in the city’s history offer “exciting” new opportunities for large tenants looking for smart alternatives to Sydney and Melbourne, Croghan says.
“We’ve been talking up Wollongong for a while, but we’ve been tight on A-Grade space. But with 17,000 sqm being delivered in the next three-to-six months, and construction of another 11,000 sqm just commenced, we now have the buildings with large floor plates ready to go,” he says.
Croghan says Wollongong’s story “sells itself”. The “gateway city” is on Sydney’s doorstep, but has housing affordability, lack of congestion and lifestyle in its favour.
Independent research by Fifth Quadrant has found that Wollongong is up to 33 per cent more cost effective than Sydney, Melbourne or Paramatta when comparing total business costs such as wages, staff turnover, and rent.
“We are strong in shared services, call centres and technology. We have the workforce already here, with 23,000 people travelling to Sydney every day, 9,000 of them managers. That’s a very big talent pool currently not being tapped.”
Technology companies are thriving in Wollongong, with the collaboration group ‘Siligong Valley’ creating a community of more than 1,000 people working together to put Wollongong on the tech map.
The University of Wollongong attracts more than 26,000 students and is ranked among the top one per cent for graduates. The University of Wollongong’s $600 million Innovation Campus – a research, technology and business precinct – is a well-established partnership platform.
A $1.5 billion investment in recent years has rejuvenated the city’s CBD, and investment continues to pour in with RLB’s latest Crane Index counting 18 cranes across the city skyline – more than Newcastle, Hobart or Darwin.
Michelle Guido, the Property Council’s Illawarra regional director, says Wollongong’s office market is “on the road to becoming a destination of choice for employment”.
The Property Council’s latest Office Market Report found total vacancy decreased from 10.0 per cent to 9.1 per cent in the year to January 2020. The A Grade vacancy is currently just 2.2 per cent.
“With three of the largest commercial developments set to come online over the next year, this will not only ensure an increase in office supply, but also strengthen our local economy providing jobs, revitalising our city centre and bringing more people to the CBD,” Guido says.
“There is no doubt our region has a number of advantages when it comes to doing business – with proximity to Sydney, our large and skilled workforce, and excellent work-life balance, we need to continue working together to support the good growth of our city,” she adds.
“With Sydney and Melbourne office markets tight, and rents going up accordingly, now is the time for companies to start looking for smart alternatives,” Croghan adds.
“When they do, they’ll find Wollongong.”