Newcastle Property Market Report
According to the latest Property Market Report for Newcastle from the Property Council, the Newcastle CBD commercial office market is living up to Newcastle’s moniker of “See Change”. While the vacancy rate for A Grade office space in Newcastle (5%) remains at nearly half the national average, there has been a modest increase of 1.6% over the past twelve months. Total vacancy increased from 6.7% to 9.2% over the same period. Chair of The Property Council’s Hunter Chapter, Edward Crawford, said the research showed the changing face of Newcastle’s CBD and a local economy adjusting to the end of the mining infrastructure boom. “In the East End in particular, we are seeing pockets of run down office space being earmarked for residential development – that includes everything from stylish studio apartments through to boutique student accommodation”
“Investors are now happy to take that risk as the inner city becomes more liveable and the financial returns more certain.” “When the city reconnects with the waterfront and light rail becomes a reality, the demand for inner city housing will increase and we’ll see the commercial hub march west towards the new transport interchange at Wickham.”
The other main factor for the increase in office vacancy is the completion of major infrastructure projects. The mining sector is wary of further expansion at the moment and construction of the Hunter Expressway is all but complete.
“That has seen a downsizing of businesses servicing those projects and the result is negative demand for office space.”
“Throw into the equation the one-off relocation of NSW Health Support Services to Charlestown, freeing up over 4,000 sqm of office space in King Street, and the rates are unsurprising.”
“However, there is no new space due to come online in the short to medium term and that creates a significant undersupply.” Mr Crawford said the Government needed to keep pushing ahead with its urban renewal strategy so the opportunities for investment and jobs growth were not lost.