Key Findings Population Growth in Newcastle Expected to Average 1,770 Persons Per Annum Between 2014 and 2031
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RESEARCH & CONSULTING Key Findings Population growth in Newcastle expected to average 1,770 persons per annum between 2014 and 2031 Gross Regional Product (GRP) was estimated to be $14.23 billion as at 2014, significantly above other major regional NSW centres Home to a significant and diverse Looking ahead, the CBD is entering a Diverse economy - no single employment base, Newcastle is the strategic period of revitalisation, underpinned by industry contributed more than and economic centre for the Lower Hunter, government funding as part of the 12% to GRP. As at 2011, the LGA accounting for the bulk of the region’s white Newcastle Urban Renewal Strategy, supported 88,175 jobs, accounting collar and administrative workforce. Its infrastructure development, and a growing for 44% of total jobs within the proximity to the broader region through population base. This changing CBD Lower Hunter region significant road and rail networks including landscape will inevitably strengthen demand for employment space. With tenant Newcastle CBD is set to the new Hunter Expressway, coupled with its demand expected to remain focussed experience jobs growth of 7,841 strong ties with Asia through the Port of within the city’s A Grade stock, moderate over the next 20 years. 60% of Newcastle makes Newcastle a logical choice downward pressure on the vacancy rate is these jobs are anticipated in white for economic investment. anticipated, as only a limited number of collar industries, equating to office demand of circa 80,000m² new office projects are planned. The Newcastle economy has undergone significant structural change over the past Office demand has been From an investment perspective, only a two decades transitioning from a concentrated in the A Grade handful of sales have occurred in recent manufacturing based economy towards market where the vacancy rate is years, which reflects a lack of available currently 2.7%, making it one of higher order service industries such as health assets being offered to the market rather the tightest A Grade markets in the care, professional services and education. than weaker demand. With non-CBD assets country Subsequently, local office demand has been trading at a large discount in comparison to boosted, particularly within the A Grade Although a thinly traded investment those positioned in core CBD locations, we office market where the vacancy rate is market, the most recent A Grade expect considerable firming in office yields amongst the lowest in the country at 2.7%, office transactions recorded core over the next two years as investors move compared with an Australian non-CBD A market yields of sub 8% up the risk curve. Grade average vacancy of 8.0%. 1 Newcastle Airport expansion was Page 1. completed in February 2015. Having Key Findings already seen total passenger movements Market overview and future trends increase by close to an average of 10% Newcastle is the capital of the Hunter per annum over the past 10 years, the Page 2. region, the second largest city in New 2,600m² extension to the existing terminal Introduction South Wales (NSW) and one of Australia’s Newcastle in context building has created a new arrivals hall largest regional economies. Located and provides a dedicated area for Page 3 & 4. 160km north east of Sydney the area is permanent customs, immigration, and Future Growth Drivers home to The Port of Newcastle, which is quarantine facilities in readiness for Highlighting Newcastle's growth the economic and trade centre for the potential international services. The position through government resource rich Hunter Valley and for much formal completion of Stage 1 means strategy, planning, infrastructure of the north and northwest of NSW. The Newcastle Airport is able to discuss and jobs Port of Newcastle is the world's largest future direct international services to and coal export port and is one of Australia's from Newcastle without infrastructure Page 5, 6 & 7. largest ports by throughput tonnage. being a barrier. The entire project is Office Market Reflecting increasing global demand, a Economic, employment and office expected to be completed in late 2015. record 164.3 million tonnes of trade was market trends handled by the Port of Newcastle in 2014, Visitor expenditure is increasingly an annual increase in port trade of 5.3%. important across Newcastle and the Hunter impacting a number of sectors in Accessibility to Newcastle is also the economy. According to the Newcastle increasing with the opening of The Hunter Destination Management Plan (2013) Expressway to traffic in March 2014. The visitors inject $722 million of direct expressway has improved travel times for expenditure into Newcastle’s economy motorists between Newcastle and the contributing to almost $1.3 billion of Upper Hunter and has improved journeys indirect expenditure across sectors across the broader network. including retail, transport and education. In Newcastle, the visitor economy directly Furthermore, in a boost to Newcastle and and indirectly contributes to over 10,000 the wider Hunter region, Stage 1 of the jobs. Newcastle’s Strategic Location Newcastle’s position makes it a natural value-adding, services and distribution point Annual Projected Population Growth Rates 2011 - 2031 1.0% 1.0% 0.9% 0.8% 0.7% 0.7% 0.6% Newcastle LGA NSW (exc. Sydney) 2 NEWCASTLE INSIGHT SEPTEMBER 2015 RESEARCH State government’s plans for Newcastle, In February 2015 Minister for Planning, with the City securing $103 million Pru Goward announced planning towards the CBD light rail plan. approval for the University of Newcastle to expand into the city centre, with a $95 In 2013, on the basis of the strategic Light Rail million, education and business precinct. directions outlined in NSW Government’s The new campus will be one of the first projects to be completed in the CBD Newcastle Urban Renewal Strategy, the The existing rail line, originally built to since the NSW Government released the NSW Government committed $460 million move freight to the harbour, now divides Newcastle Urban Renewal Strategy in to revitalise the Newcastle city centre. The the city centre in half. The decision to 2012. Newcastle Urban Transformation and replace rail services with bus services from Transport Program has been established a new transport interchange at Wickham With around 4,000 students, plus staff, to deliver this commitment. recognises that the commercial core is no starting at the campus in 2017, activity in longer close to Newcastle Station; the the CBD will increase helping to stimulate This Program seeks to “revitalise the emerging commercial core is at the the local economy and accelerating the Newcastle city centre by strengthening western end of the city, and the rail line city’s rejuvenation, similar to the recent connections between the city and creates a physical barrier between this WSU commitment in Parramatta. waterfront, creating employment area and Honeysuckle. opportunities and delivering new transport connectivity”. This program comprised of As a result of the changing urban Hunter Street Mall three elements: landscape, it is envisaged that the new 2 km light rail route will better serve the main As part of the City’s urban The introduction of a new light rail activity areas of the city and improve transformation, UrbanGrowth NSW and system linking Wickham to Pacific connections. Once the preferred light rail GPT are working closely with Newcastle Park route is determined (expected in coming City Council in preparing a concept plan The activation of Hunter and Scott months), construction is anticipated to for their 20,000m² city centre site that Streets linked to the delivery of light commence shortly after, which will then would feature new retail, commercial and rail follow the opening of the Wickham residential components. The The urban transformation of surplus Transport Interchange in 2017. development proposes high density government lands, the delivery of residential, convenience retail, markets, housing, and the delivery of improved University Expansion entertainment, cultural and leisure public domain, including parks, activities. There are plans for an Eat entertainment precincts and public In 2015 Times Higher Education ranked Street and an entertainment precinct. spaces, consistent with Newcastle the University of Newcastle in the top 3% There is also provision for recreation and City Council’s vision for the city centre. of all universities across the world, and open spaces. It is expected a revised second in Australia and number 30 in the development application will be lodged The 2015/16 State Budget reiterated the world for universities under the age of 50. later in 2015. Newcastle Proposed Light Rail Options 3 Population Growth by Age, Newcastle LGA Growth Age Cohort 2009 2014 2014% % Growth p.a. Local Market (2009-2014) Demographics 0-19 36,063 36,171 22.6% 108 0.1% 20-39 47,080 49,865 31.2% 2,785 1.2% Off the back of solid economic 40-54 29,768 30,852 19.3% 1,084 0.7% conditions, underpinned by mining and 55-64 16,216 18,124 11.3% 1,908 2.2% transport infrastructure projects, the Newcastle LGA has enjoyed solid 65+ 22,768 25,009 15.6% 2,241 1.9% population growth over the past decade. Total 151,895 160,021 100% 8,126 1.0% At the same time, growth in student numbers at the University of Source: ABS, Knight Frank Research Newcastle has ensured strong population growth in younger age cohorts. overseas migration to the Newcastle Looking ahead, population growth is As at June 2014, the Newcastle LGA had LGA totalled 5,303 persons, in addition expected to remain strong (see Figure a total population of 160,021, making it to a large inflow of residents from the 4), underpinned by growth in all age the 4th most populous LGA in NSW LGAs of Port Macquarie-Hastings, cohorts.