The Wollongong CBD has been through much rejuvenation throughout 2014, with the completion of GPT’s refurbishment and expansion of Wollongong Central bringing retail activity back to the city centre.
The Wollongong City Council’s City Revitalisation project saw the completion of refurbishment of Crown Street Mall in late 2014 with other programs including the Façade Rejuvenation Program which will commence in 2015, this program being one of the key initiatives to enhance the attractiveness of the City Centre.
While these improvements will enhance the city, a push by State government is needed to drive employment to the region as local demand has not been able to be maintained.
The Wollongong CBD market has witnessed further decline in the twelve months to January 2015 according to the Property Council of Australia’s Office Market Report, increasing vacancy to 13.7% representing over 20,000sqm of vacant space.
The 151,652sqm office market has now recorded its highest vacancy on record, the 500sqm of new additions not representing new stock, rather an amendment by the Property Council in their stock database, while the net absorption for the year at –3,485sqm includes 500sqm of this existing stock. Sublease space has reduced this period yet still represents a large 1.0% portion of the space, which is due to the reshuffling of space within the CBD after the new addition completed in late 2013. The increase in vacancy has come across all quality grades, A grade vacancy remain stable at 10.3% (up from 10.0% in 2014) with the worst result coming from B grade stock which grew from 10.3% to 19.4% after losing 2,244sqm in occupied stock. C grade contributed another 1,227sqm loss in absorption with vacancy now 15.7% while D grade was the only grade to show an increase in occupied stock, up 197sqm representing 11.0% vacancy.
Data from IRIS implies there has been some improvement in Business Conditions, with a 24.4% lift in Trading Conditions in December quarter, being the best result recorded since 2007; this has had a favourable flow on effect to the Profitability Index climbing 9.1% which is likely to pressure new job creation.