Wollongong One-Ups Sydney Market

Wollongong is continuing to attract investors, businesses and residents squeezed out of the Sydney market.

The latest Knight Frank report showed there was nearly 340ha of undeveloped industrial land, a 12 per cent increase in office stock in the last two years and a relative 55 per cent discount on dwellings in the southern city.

NSW’s third largest city has attracted many large scale developments in recent times including $1.6 billion of investment in the CBD with a further $400 million in projects in the pipeline. 

In the CBD, the $292 million Crown Street Mall extension is under way along with a number of hotel and residential, mixed-use developments.

Meanwhile, industrial land in Sydney has reached a premium, pushed up further with the development of the Western Sydney Aerotropolis, industrial portfolios and new data centers.

And as a lure for employees in the industrial and office sectors, the average price of a home in Wollongong is $743,000 with apartments around $620,000—further incentives for development.

In the medical sector, Wollongong-developer Blaq Projects is working on new plans for a 21-storey tower on 379-383 Crown Street for which it recently gained funding from CapStone Holdings.

Blaq Projects managing director Jared Beneru said they had more than 1000 apartments in the pipeline and had seen a 300 per cent increase in sales in the past 18 months.

“Since the start of Covid, demand has gone through the roof for residential. Office is still a little slow because a lot of space is coming online,” Beneru said.

▲ Blaq Projects recently gained funding for its 21-storey tower with 88 units and 11,500sq m of commercial space in Wollongong's medical precinct.

The tower, designed by Urban Link Architects, is set to be one of the tallest in Wollongong with plans poised to go before the council.

Knight Frank chief economist Ben Burstron said the city was undergoing economic expansion with an unprecedented level of investment into upgrading its infrastructure and projects in the pipeline. 

“In 2022 and beyond, we expect Wollongong to continue to expand and diversify its industry mix, potentially including an expansion in its role as a defence hub tied to the federal government’s announcement of a new base for the submarine fleet on the east coast,” Burston said.

“Wollongong is continuing its transformation from an industrial heartland into a thriving and innovative services-led economy. 

“Port Kembla’s status as a large steel production hub and a gateway for freight and logistics remains a key strength, but other key sectors including technology, defence and higher education are also now driving Wollongong’s growth and standing.”

Property Council of Australia regional director Michelle Guido said during the last year more than 8,000sq m of new office supply entered the Wollongong market.

“The office vacancy rate has increased as a result of this supply from 14.1 per cent to 14.7 per cent in January 2022,” Guido said.

“We are currently experiencing record investment across our city, especially with the increased supply of A-Grade office space to attract business and professional services into the Wollongong CBD.

“This investment will not only ensure an increase in office space supply and choice for local businesses, but also strengthen our local economy by providing jobs, revitalising our city centre and bringing more people to the CBD.”

Further south, Kiama Municipal Council is offloading a 6726sq m site overlooking Kiama Harbour and Hindmarsh Park through an expressions of interest campaign with Savills.

The council is currently preparing a town centre development control plan so the site can be developed up to six-storeys for a variety of uses as the entire Greater Illawara region becomes a development hotspot.