Hunter developer GWH has lodged plans for an eight-storey office building on the "Darby Plaza" site at the junction of Darby and Hunter streets.
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GWH, which is part-owned by prominent developer Hilton Grugeon, won a tender in October to buy 2140 square metres of government land covering a former car park and part of the old rail corridor.
The $19 million development was intended to include apartments, but the final plan comprises 8000 square metres of office space and 138 car parks across three levels, one of which is underground.
Cars will access the EJE-designed building from Wharf Road and Argyle Street.
GWH managing director Jonathan Craig said on Friday that the company had shifted its plan away from apartments so it did not compete against its half-sold Sky Residences nearby and due to a low vacancy rate for A-grade office space in Newcastle.
The Newcastle Herald reported a month ago that the vacancy rate of A-grade offices was just 2.8 per cent in 2018, down from 6.4 per cent the year before.
Mr Craig said GWH was in "detailed discussions" with two prospective major tenants, both of which were existing Newcastle companies looking for new, "prominent" headquarters.
GWH hopes to start work on the building at the end of this year, pending council approval, and open it at the end of 2020.
The redevelopment also requires the company to build a public plaza at the eastern end of the site.
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Canberra developer Doma said on Friday that it hoped to lodge revised plans for its Merewether Street apartment building in two weeks after acquiring last year a narrow strip of the rail corridor west of Darby Plaza.
The Herald reported in June that more than 30,000 square metres of office space was on the way across three buildings in Newcastle West, including a Doma project next to the interchange (16,000), the Birdwood Business Centre in Hunter Street (11,000), and the Gateway 2 building in Stewart Avenue (9000).
City of Newcastle has been promoting Newcastle West as a new CBD, but Mr Craig said both the council and Hunter Central Coast Development Corporation supported GWH's office plan for the city's traditional commercial centre.
GWH's move away from apartments in Darby Plaza comes as Newcastle unit prices have fallen eight per cent from their 2017 peak, according to CoreLogic data.