Newcastle CBD building boom creating jobs and homes

The lord mayor joined Colliers International commercial real estate agent Peter Macadam and Greg Gocher from the defence contractor Thales in speaking to a Property Council of Australia lunch at City Hall on Friday.

Cr Nelmes said Newcastle City Council hoped to be in its new offices at the Gateway development by July next year, and she saw its move, and the redevelopment of the Store site, as projects that were likely to encourage others to set up in that part of the CBD.

Read more: Newcastle council’s $7 million move west

Mr Macadam told the lunch that the industry expected an announcement on a successful tenderer for the Store site next month.

The Store site is regarded as one of the most crucial sites in the redevelopment of the city centre and the Newcastle Herald has been told by various sources that the property industry is watching closely to see what mix of commercial and residential use will go ahead on the site, which is owned by the state government.

In her speech, Cr Nelmes said the council had worked hard to get “alignment” with the government on planning decisions, and both sides had a focus on “getting the CBD moving”.

“It’s important that this urban core area, which is where we are now, has not only a density of population, but also a density of commercial activity to make it a CBD,” Cr Nelmes said.

Mr Macadam gave an overview of the Newcastle commercial real estate market, saying that the city had about 105,000 square metres of A-grade office space, which he described as “a thin market”. 

He said the city had traditionally “absorbed” about 4000 square metres of new A-grade space every year.

He said Newcastle was competing with other non-capital markets such as Parramatta and the Gold Coast for the sorts of employers who would be attracted to setting up in the CBD.

He said a lot of the recent property deals had effectively been a “shuffling of deck chairs”, with businesses moving from suburban locations into the CBD, or moving from lower grade accommodation into higher grade offices within the CBD.

Asked about the amount of residential development taking place in the CBD, Mr Macadam said it was a matter of zonings, but land was usually sold to its “best and highest use”, which was leading to apartment building, especially at Honeysuckle and Newcastle East.

“I don’t know too many places with waterfront commercial buildings and waterfront carparks, except Newcastle,” Mr Macadam said.

Mr Gocher said Thales – which built the ADI minehunters at Carrington in the 1990s – had “come home” when it announced its decision last year to re-lease the minehunter buildings and the former Forgacs shipyard next door.

He said it had stared doing up the site’s slipway, which should be in operation in August, allowing it to pursue maintenance work on vessels less than 100,000 tonnes, such as tugs. He said “state versus state” competition for defence work was “a reality” in Australia.