Geelong’s industrial heart beating for new businesses
An industrial area on the Barwon River can become the epicentre of a business cluster set to spark a property boom.
Macroplan executive chairman Brian Haratsis said Geelong’s commercial office market is poised for exponential growth with the new cluster developing at Newtown.
Mr Haratsis, an economist and future strategist, drew parallels to thriving business precinct at inner Melbourne’s Cremorne two decades ago, highlighting the early demand for office space at a Newtown strata office project.
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Cremorne is a semi-industrial suburb on the Yarra River and has become a tech hub as firms established in the area over the past two decades.
“Newtown is witnessing the emergence of professional clusters, a phenomenon that historically catalyses a surge in mixed-use developments, including food and beverage establishments, retail outlets, offices, and residential spaces,” Mr Haratsis said.
Geelong’s CBD could also accommodate more office development, but Mr Haratsis said Newtown offered a niche appeal.
“It’s like Cremorne. A lot of professionals live within the area, just like Cremorne and it’s a highly specialised area – IT, consultants, health professionals and that type of thing,” he said.
“The economic term for it is clustering. People work in clusters and again, like Cremorne is a big cluster of people based on the Yarra, this will be a big cluster of people based on the Barwon River.”
There’s already been significant investment in the area, headed by the Hamilton Group’s rebirthing of buildings on Pakington and Rutland streets as commercial hubs, where the developers remain landlords.
Hamilton Group last year acquired a historic riverfront mill on Latrobe Blvd.
Barwon Business Park, a $13m IDS Developments project on Riversdale Rd, is the first strata office development in Newtown.
“Smaller service businesses want that type of space because people are working from home more so they want a central space that people can work from with good access,” Mr Haratsis said.
“You’ve got river access from the bike paths and road access and that type of thing. And then they want the quality environment as well.
“That’s a high quality environment and very accessible to the sort of major growth areas. You think about Armstrong Creek, you know, it’s five minutes.”
With more than 60 per cent of strata offices already sold off the plan, Mr Haratsis forecast a strong demand for similar ventures, estimating another 20 business parks would be needed to meet burgeoning demand as Geelong’s population continues to grow.
“There’s demand for that type of business in Geelong, and there’s enough demand to support it in Geelong. That’s the big difference between 10 years ago, and now.”
Property prices were another factor in Geelong’s favour, with Melbourne prices substantially higher for office floorspace, while more in the workforce favoured hybrid working.
The first residential project was a false start at 510 Latrobe Blvd after VCAT sent developers of a proposed 63-dwelling apartment and townhouse project back to the drawing board.
But another project stands to inject a significant population boost in a $180m mixed use development featuring more than 340 dwellings and a childcare centre on the site of a former woollen mill.
No decision has been made as the Pakington St application is still going through the planning assessment process with City of Greater Geelong.
The application did receive 11 objections and eight letters of support.
Gartland Projects director Michael De Stefano said it was a myth that there was no demand for commercial office space.
“We’re 65 per cent sold prior to even demolition happening on site,” Mr De Stefano said.
“It shows that when people say there’s no demand for office, well that’s not true.
“There’s demand for strata office, for people to be able to own their own office and the benefits that come with that.
“We all know it’s gentrifying. There will be a big upshift (in value) and they’re laying the blueprint for others to come in and do the same thing.
“It’s what council spruiked and wanted to happen for years and now this is the first project.”