According to The Herald, the prices commercial properties in Newcastle are on track to reaching $1 billion for the first time. The increase was attributed to the city’s strong resurgence, which has tremendously affected land values. This will be very beneficial to property owners, developers, and investors.
Rise In Commercial Land Value
Data from the NSW Valuer General showed that the commercial land value in the area surged by 14% across the local government area over the last year. Even those gloomy addresses in the central business district were revived thanks to the surge in investments in the city. Hunter Street, in particular, is leading the pack. Some operators have the reservations and concerns about the effects of the government’s light rail project on their businesses. Despite that, the commercial land value for mixed-used properties in the area still surged by a massive 25% in just a year between 2015 and 2016.
Booming Residential Sector
Mixed-used sites were in demand because of the booming residential sector, according to Colliers International Dane Crawford. He added that people want to be in that area. This increase in desirability has led to the increase in the value of the land. For instance, a 20% growth was noted in areas like the Park Avenue in Adamstown and Lambton Road in Broadmeadow.
Meanwhile, NSW Valuer General Simon Gilkes noted a “strong” increase in the prices of commercial properties. He added that the commercial property market improved thanks to the new university building in Hunter Street and the construction and completion of new apartments in the central business areas and fringe locations.
Some Areas Continue To Struggle
However, not all of Hunter enjoyed this kind of improvement. Lake Macquarie’s commercial sector grew by 13% because of lower interest rates and improved investor confidence. But unlike this area, Port Stephens and Maitland still faced a lot of problems. The former saw massive decreases in the development of businesses spaces. The most affected parts are Salamander Bay and Taylor’s Beach.
New List Of Trendy Suburbs
On the other hand, Newcastle now has a new bunch of trendy suburbs and they are being led by Carrington, Maryville, Islington, and Wickham. Both commercial property and residential property land values over the past year. Crawford also described his experience when he sold the Herald apartments. He said the response he got during the sale was unprecedented. The sales ranged between $600,000 to a whopping $2.5 million. He added that they have been selling for only five months and they are now only left with a few available units. He also noted that Newcastle is “on the map.”
Iris Capital’s Sam Arnaout is expected to welcome Hunter Street’s resurgence. Arnaout invested $40 million when he acquired 1.66 hectares of the Hunter Street Mall last year. He wants to use this property to put 500 residential apartments. He also plans to put up about 7,600 meters of boutique retail and commercial space at the structure’s ground level.