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Newcastle is experiencing a revitalisation and its commercial landscape is being transformed due to a large number of private and public development projects in the city.

Fourwalls Commercial Director Bobby Suminoski has worked in Newcastle’s commercial property market for over 20 years and revealed that based on clients’ results, land and property value rose between 20-30% in 2016.

He added that the demand for office space in the east end is strong and, although rents are currently stable, increases are anticipated in the next 12 months. 

Bobby said: “Newcastle is experiencing a revitalisation, and its commercial landscape is being transformed making it a bigger and better city.

“The city has a strong and diverse economic industry base which is giving investors value, security, higher yields and lower entry values compared to Sydney.

“This is helping to complement and answer the needs of residents, businesses and workers in the area.”

Newcastle in numbers

• Newcastle is the second largest city in NSW and seventh in Australia
• It is located only two hours from Sydney, and 45 minutes from Port Stephens and the Hunter Valley 
• Newcastle airport caters for over 1.250 million passengers each year
• CoreLogic’s Cityscope report showed that in the 12 months to September 2016, the total value of commercial sales was $240.3 million, compared to $114.2 million the previous year.

Bobby added that rental growth in Newcastle has been stable with its vacancy rate at around 9%, which is under the national average.

However in the last six months to January, the Property Council of Australia’s Office market report showed that Newcastle was the city which recorded the largest decrease in vacancies.

Bobby added: “Newcastle’s rental growth has been organic through existing lease increases, and the demand for good quality space is very high with the incentives being offered either very insignificant, or non-existent.

“I believe that with the contraction in available space and the small supply coming on market in the next 12 months, we will see an increase in rentals for the higher quality grade spaces.”

Newcastle projects

Some of the projects currently underway or due to take place in Newcastle, include:

• Newcastle’s new light rail project which will connect the city’s east end and CBD
• Newcastle University’s new $95 million campus is nearing completion, and it has secured a site in the Honeysuckle Harbour for further development 
• Numerous residential unit developments have been approved with an estimated value of $2 billion
• A new international cruise terminal facility for the port has been proposed
• Hunter Street Mall is being redeveloped to provide approximately 500 new apartments, 4900m2 of retail and 2700m2 of commercial space.