'Unprecedented': inside the billion-dollar construction boom changing the face of Newcastle

NEWCASTLE is a construction zone, with more than $1.6 billion worth of development set to change the city’s skyline.

Construction activity in the city centre has ramped up in recent months as work on the light rail network coincides with a number of major projects, particularly in the West End, breaking ground and taking shape.

Nearly $900 million worth of construction is already under way, with the state government’s light rail and interchange projects taking the lion’s share of the development pie with a combined value of $583 million.

But the private sector is also flourishing – and developers say the activity taking place is “unprecedented” in Newcastle’s history.

The Newcastle Herald can reveal more than $640 million worth of development is still in the pipeline, with private sector investment in residential projects set to overtake government-funded projects over the next two years.

Among the big-ticket projects slated to start are the $222 million redevelopment of Hunter Street Mall, the $73 million Verve Residences in Newcastle West and the $71 million Railway Lane Apartments in Wickham.

According to Cordell property data, a further $274 million worth of other projects have either been approved, waiting approval or in the planning stage.

Major residential projects currently under construction include the $44 million aged care facility and $26 million Holiday Inn Hotel, both on King Street, the $13 million Aero Apartments on Hunter Street and the $10 million Bishopsgate Apartments in Wickham.

TOOLBOX TALK: Workers on site at the Aero Apartments development. Picture: Max Mason-Hubers

TOOLBOX TALK: Workers on site at the Aero Apartments development. Picture: Max Mason-Hubers

The hive of activity, however, is not limited to high rise.

The Newcastle Interchange at Wickham is inching closer to completion and work has begun on a light rail depot across Stewart Avenue, in the place of the former Wickham train station.

Work to prepare the track for the Supercars race later this year has crews busy along Wharf Road and Watt Street. 

And Newcastle council’s $36 million Bathers Way project continues at South Newcastle beach, King Edward Park and up to Strzelecki Lookout.

Colliers International, a leading property manager in the Hunter, said the city should expect to see cranes in the sky for at least the next five years.

“There has never been so many tradies in town,” Colliers’ Newcastle director Chris Chapman said. “The coffee shops used to be full of young professionals; now they’re filled with tradies. And this is only the beginning, we’re only just getting started.”

Property Council Hunter director Andrew Fletcher said demand for residential property in Newcastle was “the strongest in history”. 

“We’ve seen nearly $2 billion of private investment since the heavy rail line was truncated,” Mr Fletcher said.

Lord Mayor Nuatali Nelmes said the growth was because the council had fostered “strong partnerships” between various levels of government and the private sector. “No other council has been able to do it, but this council has,” she said.

As new works get under way, all eyes are on how long the current period of growth can be sustained, and whether Novocastrians are comfortable to wear the inevitable pain before the gain.

‘Things are really taking off now’

BEFORE: Core Project Group directors Tom Elliot and Jamie Lind are riding the wave of Newcastle's construction boom. Picture: Max Mason-Hubers

BEFORE: Core Project Group directors Tom Elliot and Jamie Lind are riding the wave of Newcastle's construction boom. Picture: Max Mason-Hubers

For a long time, Newcastle had “flat feet”. Now it’s running full steam ahead.

That’s the view of Tom Elliot and Jamie Lind, who are a success story from the city’s building boom and responsible for millions of dollars worth of construction in the West End.

The duo head up local firm Core Project Group, which was established six years ago, quickly rising to become one of the city’s leading builders.

The company’s major projects are clustered within a short walk from each other – a $44 million aged care building, $4 million five-storey child care centre, both on King Street, and a $21 million office block on Stewart Avenue. 

They say they are projects that will reshape the West End, bringing people and jobs for years to come.

Mr Lind said the level of construction activity in Newcastle was “unprecedented”.

“Newcastle has got a really positive vibe about it at the moment,” he said. “We had flat feet for a while there, but things are really taking off at the moment. For so long, Newcastle hasn’t been led well, but the state and federal governments put their money where their mouth is and kicked it all off.”

Mr Lind said the redevelopment of the Newcastle Court House, which was followed by the light rail project and new university building, sparked a flurry of construction activity in the city centre.

AFTER: What Core Project Group's Stewart Avenue development will look like.

AFTER: What Core Project Group's Stewart Avenue development will look like.

“People realised there was investment happening here, and they wanted to be where the action was,” he said.

But with renewed investment came increased competition, particularly from out of town firms, which puts pressure on builders to remain cost competitive.

There is also pressure to attract skilled labour, Mr Lind said. 

“There’s a shortage of it over the state,” he said, adding that builders were adapting their techniques in response.

Mr Elliot said it was his hope that healthy development activity continued beyond the next five years.

“We should keep the momentum going, but we shouldn’t necessarily be relying on the government to do that for us,” he said. 

“We need to keep promoting Newcastle as a great place to live and work.”

Pain before gain: business chamber

DIVERSION: Hunter Business Chamber has warned of pain in the CBD as new projects take off. Picture: Max Mason-Hubers

DIVERSION: Hunter Business Chamber has warned of pain in the CBD as new projects take off. Picture: Max Mason-Hubers

THE Hunter Business Chamber has warned of “difficult days” ahead for CBD businesses as the city undergoes intense construction activity.

But chamber president Bob Hawes, who was formerly the head of the Hunter Development Corporation, says other businesses will flourish as a result of increased demand for construction material.

It is the double-edged sword the business chamber is trying to manage as concern grows amongst CBD retailers about their survival once new major works begin.

With Supercars and Bathers Way works in full swing, this week East End businesses met to discuss the financial situation confronting them.

Mr Hawes admitted many Hunter Street retailers could experience a similar situation, particularly after street blocks begin to close for light rail works, but said there was no “one size fits all” solution.

“Businesses who rely on the regularity of foot traffic, that’s where you will see disruption and some concern,” he said. “[But] it’s a like a fitness program, it will be the pain before the gain.”

A map showing development activity in the Newcastle CBD. Picture: Colliers International

A map showing development activity in the Newcastle CBD. Picture: Colliers International

Mr Hawes said it was key businesses knew what was coming and when.

Meanwhile, the Property Council has signalled that Newcastle may be experiencing “two-speed” growth.

The industry advocacy group said there was a deficit of 30,000 homes in the Lower Hunter. 

“Despite all the inner-city apartments, we still have a chronic housing shortage across the Hunter,” Property Council Hunter director Andrew Fletcher said, adding that the “biggest threat” to Newcastle’s growth was housing affordability.