Wanted: large office space in Geelong
Geelong needs more large office space if it wants to attract big businesses wanting to relocate headquarters away from Melbourne, according to local property experts.
Already facing the economic fallout from planned manufacturing shutdowns by Alcoa and Ford, Geelong could miss out when it comes to attracting government bodies and large companies because of its shortage of generously sized corporate spaces.
Following the relocation of the TAC and establishment of the National Disability Insurance Scheme in the city, as well as EnergyAustralia plans to establish a 300-strong call centre there, local agents claim that sizeable office space has now been soaked up.
WorkCover moving to Geelong
Plans to relocate WorkCover’s headquarters to Geelong, as promised by Premier Denis Napthine if his government is re-elected in November, could be stymied unless developers are encouraged to begin building soon.
Colliers International agent Ben Young said organisations wanting to relocate to Geelong were limited by a lack of office spaces of 1000 sqm or more.
“If you are going to establish a big presence here with a workforce of 100 to 200, 1000 sqm is the minimum you would need and you are not going to find that in the Geelong CBD,” Mr Young said.
Sustainability in high demand
He said government bodies and big corporates now demanded greater sustainability qualities in the work spaces they occupied, and those attributes were scarce in Geelong CBD buildings.
“There are some B-class spaces around but they would need to be redeveloped before they attracted the type of tenants that want to have a significant presence here.
“The sort of attention these sites require could take several months or longer to implement and on the one hand you have developers saying they cannot borrow money to upgrade unless they have pre-commitments for two-thirds of the spaces.
“On the other hand, prospective tenants may not be prepared to wait for developers to obtain finance and refurbish their buildings to a suitable standard,” he said.
Geelong caught in Catch-22
Mr Young said the scenario was a Catch-22, which may mean the regional city misses out on corporate opportunities that would go to other large commercial centres that were better stocked with strata office buildings.
He said his agency had identified three or four Geelong sites that could be redeveloped, but their owners were hamstrung.
There are three or four sites that could be developed but their owners are hamstrung.
Don Hough, of agency Maxwell Collins, echoed the concerns. He cited sites at the entrance of the CBD, such as 19A Gheringhap St, that were ripe for strata office construction, but developers needed more encouragement before committing.
“There is no doubt the big office shortage in Geelong has reached a critical point,” Mr Hough said.
Geelong an appealing location
“Big organisations that want to relocate to Geelong because we have good infrastructure, affordable housing and a dependable workforce are looking at a one to two-year yawning gap in the supply of 1000 sqm plus new office space.
“Unless our new mayor (Darren Lyons) can get things moving to encourage developers to dig deeper, Geelong will struggle to attract bigger tenants.”
Mr Hough called for council to take the lead in creating a cross-sector taskforce to deliver solid incentives to persuade developers that there was a good business case for building strata offices in Geelong.
Geelong Council did not respond to requests for an update on its Future Proofing Geelong scheme that aims to support investment in retro-fitting older commercial buildings.
Other property sectors thriving
Colliers’ Mr Young said, however, that other commercial property sectors in Geelong were not facing the same dilemmas.
“Geelong is buzzing along with a fast-growing population expected to reach 300,000 by 2030 and many attractive investment opportunities outside the CBD to cater to the expanding demographic,” he said.
A case in point was the former CSIRO 63,700sqm site at 1 Henry St, Belmont, which the agency is selling on behalf of the Federal Government.
Geelong is buzzing along with … many attractive investment opportunities outside the CBD.
Comprising a mix of of single and two-storey office buildings, laboratories and warehouses, the site is in the middle of a residential zone.
As such, it could be redeveloped into more housing, an aged care or retirement village or even as a campus for a private educational facility, Mr Young said.
The property is for sale by tender closing on Friday, June 6 at 2pm.
Earlier in that week, tenders also close for a second sizeable property being marketed by Colliers on Geelong’s outskirts.
The 3.38 ha property at 5 Haworth Court, Breakwater, is being sold for the State Department of Finance and Treasury and the Geelong Racing Club.
The site collects $21,000 in rental from phone towers operated by Optus and Vodafone.
Colliers said, subject to approval, the site could be redeveloped to accommodate different types of industrial uses. For instance, it is large enough to subdivide into a multi-lot business park or to house a large warehouse and associated amenties.