The benefits on investing in Newcastle’s commercial sector will be the focus of events in Newcastle, Melbourne and Sydney this month.
The commercial property information sessions themed ‘New year, new opportunity, Newcastle?’ are being hosted by APN Property Group, a Melbourne-based specialist real estate investment manager, in conjunction with Core Property Research and Newcastle commercial agency Colliers International.
APN Property Group has strong investment in the city, including the $158.6 million acquisition of WesTrac Newcastle reported in the Australian Financial Review in November 2016.
Fund manager Alex Abell said Newcastle was “a destination that hasn’t really hit the radar of Sydney and Melbourne investors” but had plenty of appeal.
“We think that the shrewd Newcastle investors have been doing well out of investing in Newcastle over a long period of time,” Mr Abell said. “Sydney and Melbourne are severely congested … our view is there needs to be a real focus on developing regional cities, places like Newcastle.”
The Newcastle Herald reported on Thursday the city’s office vacancy rate had fallen from 14.5 per cent in 2010 to 7.1 per cent last year with the vacancy rate of Newcastle’s most expensive A-grade office space dropping to just 2.8 per cent in 2018.
“You can occupy a commercial building in Newcastle for roughly around $400 a metre of rent. If you go to Sydney it’s a thousand,” Mr Abell said.
Colliers International managing director Chris Chapman said “the Newcastle story is now out there nationally” with increasing out-of-town interest for the city’s commercial property.
“The Newcastle commercial market is growing at an excellent rate and our net absorption, our take up of new space, is increasing year on year and our vacancy rate is dropping,” Mr Chapman said.
He said A-grade office space in Newcastle has increased over the past five years from around 85,000 square metres to 110,000. In Newcastle West, the Gateway 2 will deliver around 10,000 square metres of office space this year and Doma Group are developing a commercial building of around 15,000 square metres next to the Newcastle Interchange.
“If the vacancy rate stays low, that means that exponentially we’re seeing more businesses come to town on a yearly basis, which is so exciting,” Mr Chapman said.
The first of the three seminars discussing the benefits of investing in Newcastle’s commercial sector will be held at Customs House on February 12, followed by Melbourne (February 25) and Sydney (February 26).