Property Australia

From steel city to smart city

PROPERTY AUSTRALIA August 6, 2019

Wollongong is a city on the move, as population growth, dynamic and diverse projects and big-ticket investments reposition the steel city for the metropolitan century.

Wollongong City Council’s economic development manager Mark Grimson says more than $1.3 billion in investment has poured into the city’s CBD over the last five years – and another $600 million is in the pipeline.

Grimson is currently driving the council’s economic development strategy, which aims to double the number of new jobs to 10,000 by 2028.

Wollongong is New South Wales' third largest city after Sydney and Newcastle, with an estimated population of 300,000. But as many as 23,000 people commute from the Illawarra region to the Sydney basin each day, Grimson explains.

“But we have a very large talent pool of residents and highly-skilled graduates coming out of the university –and this is a key attractor for any business wanting to grow or relocate. We have a lot of highly-skilled residents who will take a job in their city in a heartbeat.”

Employment options beyond the mainstays of mining, manufacturing and steel mills are growing, however. The University of Wollongong’s $600 million Innovation Campus – a research, technology and business precinct – employs 1,500-plus people. And in March the University and Lendlease inked contracts on the first stage of the $500 million Health and Wellbeing precinct – Australia’s first intergenerational university community.

Grimson says the flourishing ecosystem of tech and knowledge sector companies employs around 6,000 people in Wollongong. He points to tech company NEC Australia, which opened a corporate office at the Innovation Campus in 2016.

“NEC initially went to market for 70 roles, had 2,000 applications and was blown away with the calibre. Since then NEC has doubled its workforce, with 140 people sitting in its IT centre.”

Grimson says the property industry has a big role to play in creating dynamic workplaces that support “back-of-house” functions for large corporates. The city is also cultivating a vibrant start-up community, he says.

“Wollongong is on Sydney’s doorstep, but factors like housing affordability, lack of congestion and lifestyle work in our favour. The message we are trying to impress upon business leaders and decision makers in Sydney is: if your business doesn’t need to be in Sydney then Wollongong is a viable alternative.”

 

A strong commercial heartbeat

The latest office market figures record an A grade vacancy of 1.4 per cent in Wollongong’s CBD, falling from 3.4 per cent the previous year.

The vacancy rate across all levels of stock has fallen to 10 per cent, which “indicates a healthy local economy and good prospects,” says Michelle Guido, the Property Council’s regional director for the Illawarra.

070819 - Story 4 - Michael CoghlanThe office market may be tight, but four new commercial developments are in the pipeline, including two large 5,550 sqm A grade offices, says MMJ Real Estate’s director of commercial leasing, Michael Croghan.

“For a long time, we’ve been talking about attracting decent sized new businesses to town but didn’t have the stock – very soon we’ll have the stock.”

The industrial sector is also in great shape. Sheds designed for traditional manufacturing are perfect platforms for logistics and booming e-commerce businesses, Croghan says.

“On the back of Sydney’s industrial market going gangbusters, our competitive advantage is big heavy-duty sheds. To build those today in Sydney is cost prohibitive – but we’ve had these for years in Wollongong.”

 

A port of growth

070819 - Story 4 - Greg WallsPort Kembla, just two kilometres from Wollongong’s CBD, is NSW’s “port of growth”, says Greg Walls, planning manager for NSW Ports.

Port Kembla delivers nearly $543 million in gross regional product to the Illawarra, or “roughly $1,805 per person,” Walls explains.

Where once it was a coal and grain export hub, Port Kembla now also handles imports and exports of agriproducts, bulk cargo, heavy industrial machinery and “100 per cent of NSW’s motor vehicle import trade”.

Trade has expanded to meet Greater Sydney’s population boom, and the NSW Government plans to make Port Kembla the state’s next container port once Port Botany reaches capacity. Port Kembla is well located to service the import needs of the growing population of Greater Sydney and has good road and rail connections throughout NSW, Walls says.

“The vital role Port Kembla plays for the NSW construction industry is set to grow, with likely increases in volumes of cement, sand, aggregate and bitumen,” Walls adds.

Australian Industrial Energy’s planning application to build the $250 million Port Kembla Gas Terminal was recently approved and, if given the green light to commence, could supply more than 70 per cent of state’s gas needs.

 “The project is expected to underpin approximately 15,000 jobs within the Illawarra region which are dependent on affordable gas supplies,” Walls says.

 

Blue skies ahead

“Wollongong is a city on the move. There are 11 cranes in our CBD – more than Adelaide – and lots of projects are coming out of the ground. The signs are good,” the Property Council’s Michelle Guido says.

“What we need now is for all stakeholders and all levels of government to work together to strategically plan for our city, and to ensure that investment happens in the right places. This is critical to our future economic growth.”

Ten thousand Sydneysiders moved to Wollongong over the last census period, fuelling demand for diverse housing, Guido explains.

The Property Council continues to champion a City Deal for Wollongong, and faster rail connecting the Illawarra to Sydney as the new Western Sydney Aerotropolis takes shape.

At the fine-grain, Mark Grimson points to the 80-plus extra cafés and pocket bars have set up shop since 2012 as council actively supports café culture and outdoor dining. Wollongong’s wonderwalls attract artists and Instagrammers from around the world, while Destination Wollongong is busy bringing major events to the city.

070819 - Story 4 - Holly HowellHolly Howell, The GPT Group’s marketing manager in Wollongong, is excited about her city’s “period of significant rejuvenation”.

The GPT Group has a big stake in the Illawarra as the owner of Wollongong Central. A $200 million expansion of the mall in recent years has created a shopping experience that attracts people from around the region.

“We are in a great position to shift previously stagnant perceptions,” Howell says.

“Wollongong is no longer a regional steel city, but an expanding metropolitan centre filled with opportunity and innovation, and one that encourages businesses to invest and relocate.”

MMJ’s managing director Tim Jones agrees.070819 - Story 4 - Tim Jones

“Our city centre is getting stronger and stronger. Wollongong has moved away from what it once was. It’s not a sleepy hollow. There’s a real inner-city vibe.”

The city “sells itself” as a business and lifestyle destination, Jones adds.

“The more people look at it, the more they realise there’s a lot going on in Wollongong. We’ve been through the hard times, and we’ve come out the other side a better city. There are blue skies ahead.”

 

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