RESEARCH & CONSULTING

Key Findings Population growth in the Wollongong LGA is expected to total 23,575 persons out to 2031

Gross Regional Product (GRP) was estimated to be $11.9 billion as at 2015 for the Wollongong LGA, representing 61% of the Illawarra While the local office market has struggled region’s GRP in recent years from tenant relocations to As at 2011, the Wollongong LGA Currently home to 208,875 residents and newer premises and a lack of expansionary supported 72,551 jobs, accounting 72,551 jobs, the Wollongong LGA is the requirements from existing occupiers, there for 60.3% of total jobs within the economic centre for the Illawarra region, are positive signs beginning to emerge from Illawarra region accounting for 61% of the region’s Gross the local office market. With the Regional Product (GRP). Supported by key announcement that the State Emergency Wollongong CBD is projected to infrastructure and education assets including experience jobs growth of 3,773 Services (SES) will relocate to the former Port Kembla and the University of over the next 20 years. 72% of ATO building in early 2017, the overall office these jobs are anticipated in white Wollongong, Wollongong plays a key role for vacancy rate will significantly reduce once collar industries, equating to office not only the Illawarra but the broader southern the lease commences, as new supply demand of circa 54,280m² and western regions of NSW. remains constrained. This is expected to signify a period of modest rental growth. A-Grade office vacancy rate Historically, the local economy was currently measures 8.5% (from characterised by a high provision of 74,626m² total A-Grade stock), From an investment perspective, demand is manufacturing based employment, centered although vacancy will reduce expected to remain solid throughout 2016 significantly in early 2017 following around Port Kembla and its associated heavy and 2017 as investors are attracted to the the recent announcement that the industries. However, the economy has favourable yields on offer, particularly when SES will move to the former ATO undergone a major structural shift over the compared to the Sydney Metropolitan building past decade. Over this period, employment region. This is also true of the industrial growth has largely stemmed from higher order market, whereby investment will continue to Highlighted by recent sales, knowledge based industries including investment demand for both office be strong for functional assets, as the and industrial assets in healthcare, education and IT services. With business outlook remains positive with local Wollongong is strong, as investors these industries expected to underpin growth firms expecting trading activity to improve are attracted to the high yield metrics in the Australian economy over the next five throughout 2016, coupled with positive on offer when compared to Sydney years, Wollongong is well placed to capitalise. overflow demand from Sydney.

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region, has traditionally been known for Page 1. its industrial production, manufacturing, Key Findings mining and port related activities. Port Market overview and future trends Kembla, located immediately south of the Wollongong is one of Australia’s largest Wollongong CBD, is NSW’s port of Page 2. non-capital cities, and owing to its growth and is a key infrastructure asset Introduction connectivity, is often perceived and for NSW and an economic driver in the Wollongong in context recognised as a global satellite city. Illawarra region, employing around 5,200 Page 3 & 4. Wollongong lies on the narrow coastal people and contributing $760 million to Future Growth Drivers strip between the Illawarra Escarpment NSW GSP. Port Kembla is home to Highlighting Wollongong's growth and the Pacific Ocean, approximately 80 NSW’s largest motor vehicle import hub position through government kilometres south of Sydney, a little over and grain export terminal, and is the strategy, private investment an hour to both the international airport second largest coal export port in NSW. infrastructure and jobs and the proposed airport at Badgerys Creek, and a 2.5 hour drive south west to However, in more recent times, the Page 5, 6 & 7. Canberra. region’s economic base has become Office Market increasingly diversified, to include tertiary Economic, employment and office The urban areas of Wollongong and market trends health and education, retail, construction, neighbouring Shellharbour form a public administration, tourism and Page 7. contiguous community that, according to telecommunication industries. Industrial Market the 2015 Illawarra-Shoalhaven Regional Wollongong is also the headquarters to a Key metrics and trends Plan “is likely to be home to around half a number of major companies including million people by 2050”. Furthermore, the WIN Television, AHM, IMB and the IRT. strategy paper states that “Metro Other major groups who are represented Wollongong is at the heart of this urban with significant property holdings include area and will drive the economic growth, GPT, Stockland, AMP and Westfield. employment and diversification of the region’s economy.” Although there were no specific commitments to major infrastructure Population growth is likely to stem from projects across the Illawara region in the the spillover demand from South West May 2016 federal budget, the New South Sydney. Even with its connectivity and Wales Government is currently funding a coastal lifestyle Wollongong offers number of infrastructure projects to affordable living, with relatively low facilitate both the regions economic housing costs compared with the Greater transition and population growth. These Sydney Metropolitan region. Houses and infrastructure improvements include the apartments across Wollongong are $116 million upgrade of Wollongong

currently priced around 35-40% cheaper Public Hospital, the $251 million than the Greater Sydney average (source: commitment to Shellharbour Hospital, the Gross Regional Product By Illawarra LGA (2015) Residex). $550 million Albion Park Rail Bypass, the $580 million Berry Bypass, and $340 Bn $12 Wollongong, and the wider Illawarra million for the Berry upgrade.

$10

$8

$6

$4

$2

$0 Wollongong Shoalhaven Shellharbour Kiama LGA LGA LGA LGA

2 WOLLONGONG INSIGHT JUNE 2016 RESEARCH

Sciences facility, and the iAccelerate Surgical Services Centre. In addition to the program, which aims to help grow new redevelopment of the hospital, 2015 saw businesses. The three-storey, $20 million, the $30.5 million parking facility upgrade, 4,000m² iAccelerate Centre at UOW’s delivering close to 750 additional car spaces. University Excellence Innovation Campus will feature space for Alongside the Public Hospital, Wollongong more than 280 entrepreneurs offering start Private Hospital, a $120m healthcare facility located in the centre of Wollongong’s health In 2015 the University of Wollongong -ups the unique opportunity to partner with precinct, opened in February 2016. The 151 (UOW) ranked the 17th best modern a university, and exploit its resources. bed hospital boasts state-of-the-art facilities university in the world*, and within the top and offers a full range of medical, surgical 2% of all universities globally. The Student accommodation at UOW is also and maternity services. These University is committed to further undergoing a major expansion and redevelopments will add to Wollongong’s improvement, growing its student transformation that will develop and strength as a major medical, health, teaching population, developing its education increase the vibrancy of the Wollongong and specialist referral centre for the Illawarra framework, and accelerating its local campus. UOW has entered into a long- region. business association. term licence agreement of its entire

student accommodation portfolio with Already in motion is the Wollongong Living + Learning Partners, who is Retail Developments Campus Master Plan addressing the investing in two newly built, on-campus University’s vision and goals for future residences, taking the number of beds the As part of the City’s urban transformation, growth over the next 20 years. With over University can provide to more than 2,500. the commercial core has seen a $200 million 13,000 full time students, plus staff, any upgrade to Wollongong Central by GPT. The additional activity in the region will Hospital Upgrades 18,000m² expansion delivered 75 additional stimulate the local economy and specialty stores, a new supermarket, accelerate the city’s evolution. New Wollongong Public Hospital is currently department store, and over 650 car spaces. initiatives and developments to promote undergoing $116 million worth of capital Alongside the GPT retail upgrade, the $19.4 industry and excellence include the works enhancements which include the million refurbishment of Crown Street Mall in University’s $80 million Molecular and Life construction of the Illawarra Elective 2014, part-funded by a $5 million grant from the Australian Government, is reviving Wollongong as a retail destination.

Metro Wollongong in Context—Distinct Sector Precinct's Wollongong comprises distinct precincts – health, education, the commercial core, and the waterfront Logistics Growth

The continued upgrading of the Port Kembla operation is creating further opportunities for groups operating in the logistics sector. Port related industries and services will develop to satisfy the port’s expanding trade.

Land Releases

A number of large subdivisions and land releases are currently ongoing within close proximity to Wollongong, which will provide further demand for goods and services. West Dapto Urban Release Area is about to experience land releases allowing for an additional 19,500 new dwellings, creating around 8,500 jobs. The West Dapto Master Plan has been prepared to guide the development of the release area over the next 30+ years. Calderwood Valley, a 609 hectare land subdivision, is currently underway and is anticipated to provide around 4,800 homes for nearly 12,500 residents. The project will inject an estimated $2.9 billion into the local economy during the 20 year construction period in the form of payments to goods and service providers.

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Population Growth by Age, Wollongong LGA

Growth % Growth p.a. Age Cohort 2010 2015* 2015% (2010-2015) (2010-2015)

Local Market 0-19 50,167 50,548 24.2% 381 0.2%

Demographics 20-39 56,275 57,441 27.5% 1,166 0.4%

Following a large restructure of the local 40-54 40,020 40,522 19.4% 502 0.2% economy, population growth in the 55-64 22,258 24,230 11.6% 1,972 1.7% Wollongong LGA has been strong over the past decade, increasing at an average 65+ 31,748 35,927 17.2% 4,179 2.5% annual growth rate of 0.9% which has Total 200,468 208,666 100.0% 8,198 0.8% been on par with the NSW non-metro Source: average for the same period. As at June ABS, Knight Frank Research *Note—2015 is a KF Research estimate (latest actual data is 2014) 2015 (latest available data), the Wollongong LGA had a total population of In line with broader demographic trends, persistent outflow of young adults in their 208,875 persons, making it the most retirees have accounted for the bulk of late teens and twenties. Between 2001 populous LGA in NSW outside of Sydney and 2007, the population of persons and the third largest overall in NSW behind population growth in Wollongong over aged between 20 and 39 declined by Blacktown and the Sutherland Shire. the past five years, with 49.7% of the 2.1%, however in response to a national Highlighting it’s importance within the area’s population growth (or 4,179 boom in student enrolments and solid Illawarra region, Wollongong represents persons) coming from persons aged employment growth in the region, 52.2% of the region’s population. 65+. While a large share of this has population growth for this age cohort stemmed from ageing of the local By area, the northern suburbs of the LGA resident base, Census migration increased by 1.9% in the two years to including Helensburgh, Thirroul and Bulli estimates show a strong inflow of aged June 2015. have enjoyed strong population growth persons from Sydney with 699 persons over the past decade, particularly from aged 65+ relocating within the Looking ahead, strong population growth 2007 to 2009 as a large number of people Wollongong LGA between the 2006 and is expected to eventuate out to 2031, at relocated to the area in search of more 2011 Censuses. which point 232,450 persons are affordable accommodation. Similarly, the expected to call the Wollongong LGA University of Wollongong has proven to be Underpinned by local employment home. For the broader Illawarra region, the key source of population growth in opportunities and the University of population growth is expected to central Wollongong (SA2), highlighted by Wollongong’s recognition as one of the average 3,130 persons per annum its demographic structure with 27.2% of best universities in the world, the 20-39 between 2015 and 2031, 47% of which local residents being aged between 20 age cohort has undergone a rapid is expected to stem from the Wollongong and 29, compared to the broader turnaround in recent years. Previously, LGA. Current trends are expected to Wollongong LGA average of 14.9%. the attraction of Sydney for employment continue with superior growth expected and education opportunities ensured the amongst persons aged 65+.

Wollongong & Illawarra Historical Population by Major Non Sydney Wollongong Population Growth Population Growth LGAs Projections by Age Population Number and Growth Rate June 2015 2010-2031

3,000 1.6% 220,000 Projection 250,000 208,875 232,450 225,700 1.4% 204,166 218,300 2,500 208,875 210,350 200,000 200,468 1.2% 200,000

2,000 1.0% 180,000 173,138 150,000 1,500 0.8% 161,225 159,981 160,000 0.6% 100,000 1,000

0.4% 140,000 500 50,000 0.2%

0 0.0% 120,000

0

2013 2007 2008 2009 2010 2011 2012 2014 2015

2006 2010 2015 2016 2021 2026 2031

Wyong

Lake Gosford

WOLLONGONG POPULATION GROWTH P.A. Newcastle Macquarie 0-19 20-39 40-54 55-64 65+ ANNUAL GROWTH RATE - WOLLONGONG LGA (RHS) Wollongong ANNUAL GROWTH RATE - TOTAL ILLAWARRA (RHS)

4 WOLLONGONG INSIGHT JUNE 2016 RESEARCH

Economy Of note, Wollongong has a large From a white collar perspective, healthcare contribution from emerging growth (11,118 jobs), education and training Underpinned by its diversified mix of sectors including healthcare, education (8,170 jobs) and public administration and industries and contribution to the and information technology. With these safety (4,531 jobs) are the key industries, region’s Gross Regional Product (GRP), industries expected to underpin growth in all of which have experienced robust Wollongong is the economic focal point the Australian economy over the next five growth in recent times (see Figure 6). Over within the Illawarra region. Strengthened years, Wollongong is well placed to the five years to 2011, employment growth by its connection to both domestic and capitalise on the next phase of growth. in white collar industries in Wollongong offshore trading partners through Port measured 2.3% per annum, significantly Kembla, the port is the main Employment above total employment growth of just thoroughfare for mining and agriculture 0.7% over the same period, brought about exports for the southern and western The employment profile of Wollongong by a contraction in manufacturing regions of NSW and is the primary hub has changed significantly over the past employment. Employment growth over this for vehicle imports into NSW. Its two decades, transforming the once period was particularly strong within importance to not only the Illawarra manufacturing dominated economy into a healthcare (+2,003 jobs) and education region but the broader NSW economy diversified knowledge based environment. and training (+956 jobs). has proved to be a catalyst for To give some perspective, manufacturing economic prosperity in the Wollongong based employment accounted for 27.3% What Businesses are LGA through both output and of jobs in the Wollongong LGA at the 1986 employment. Census, compared to 11.8% in 2011. As Located in the CBD? at the 2011 Census, the Wollongong LGA As at June 2015, there were 3,292 In 2015, GRP for the Wollongong LGA supported 72,551 jobs, accounting for businesses trading within the Wollongong was estimated at $11.9 billion which is 60.3% of jobs within the Illawarra region. CBD (Wollongong SA2 region), the second largest in the state outside Similarly, given Wollongong is the key 54% of which were sole trading/non of Sydney, only behind Newcastle. In administrative centre for the Illawarra, the employing businesses while a further 29% total, the Wollongong LGA contributes Wollongong LGA represents 59.9% of the employ between 1 and 4 workers. There 61.1% to the Illawarra’s GRP. The region’s white collar jobs (34,938 jobs). were 111 businesses who employed diversity of the local economy is between 20 and 199 workers, while three reflected in the contribution of industry Highlighting a strong self containment rate businesses (all in retail trade) employed sectors to the LGA’s GRP with no within the Wollongong LGA, of the 82,000 200+ workers as at June 2015. singular industry contributing more than employed residents living in the LGA, 65% From an office space perspective, there 16% to the local economy (see Figure also work in the LGA, 22% of which work are currently 1,896 businesses located 5). Notable industries include rental, within the Wollongong CBD. A large share within the dominant white collar industries hiring and real estate services (15.3%), of the remaining employed residents travel accounting for 58% of total businesses. By financial and insurance services (9.7%) to Sydney for work with the CBD, size, 86% employ four or less workers. and healthcare and social assistance Sutherland Shire and Campbelltown being (9.2%). the next dominant destinations. Demand Projections Looking ahead, the Wollongong LGA is Gross Regional Product Employment & Employment Growth anticipated to experience employment By Major Industry (2015) White Collar Industries (2006-2011) growth of approximately 11,770 between

12,000 2011 and 2031, underpinned by solid Healthcare & Social Rental, Hiring & Assistance gains in retail trade and healthcare, Real Estate Services reflecting a strong link between population Other 10,000 15.3% growth, the LGA’s ageing population and Education Financial & 8,000 & Training employment opportunity. 59% of 31.1% Insurance 9.7% Services anticipated employment gains over this

6,000 Public Administration period are expected to stem from & Safety 9.2% dominant white collar industries. Healthcare & Professional, Scientific 5.4% & Technical Services Social 4,000 Financial & Public 8.5% Assistance Insurance Services Administration 6.0% In terms of the white collar jobs within the

& Safety 6.5% 8.3% 2011 AT AS EMPLOYED PERSONS Information Media & Manufacturing Administrative & Wollongong CBD, jobs growth of 2,714 is Construction 2,000 Telecommunications Support Services expected between 2011 and 2031 (growth Mining Education & Rental, Hiring & Real Training Estate Services of 15%). Based on a conservative office 0 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% density ratio of 20m² per worker, this ANNUAL EMPLOYMENT GROWTH (2006-2011) equates to 54,280m² of office space

5

demand over the next 20 years. With the space accounting for 48% of total stock. vacancy rate currently measuring 12.2% Over the past 12 months, there has been Development Activity a marked turnaround in the Wollongong within Wollongong, a share of this will be Since the completion of the current ATO office market with a pick up in tenant absorbed in existing office provisions. In building in late 2013, adding 6,600m² to demand stemming from both business this case, we estimate the need for the market, there has been no major new approximately 35,000m² of additional expansions and new market entries. Over the 12 months to January 2016, tenant developments in the CBD. Recent office space over the next 20 years. additions to supply have stemmed from demand, as reflected by net absorption figures measured 4,341m² which was the smaller mixed use projects. However, this Office Market highest level since January 2011. In turn, has partly been driven by the elevated the vacancy rate has reduced to 12.2%, vacancy rate which has stifled developer Fundamentals down from 13.7% 12 months prior. appetite to progress new projects.

With signs of positive economic data Notably, 57% of net absorption over the Looking ahead, the supply pipeline in emerging from Wollongong, underpinned past 12 months has been for A-Grade accommodation as tenants take Wollongong is limited with the only by a strengthening labour market and earmarked project being the DA approved growth from key emerging sectors such advantage of favourable rental and 134-148 Keira Street development which as education, IT and healthcare, business incentive metrics. has the potential to add 5,200m² to confidence remains buoyant which in turn supply levels. However, with the CBD is proving favourable for the local office At present, the A-Grade vacancy rate in dominated by smaller private businesses market. According to the December 2015 Wollongong stands at 8.5%. Despite being an improvement from the 10.3% IRIS Illawarra business survey (latest and current rental levels not conducive for release), trading conditions for businesses recorded 12 months earlier, the A-Grade development, it is unlikely that the project remained in positive territory while the vacancy rate is well above historical will occur in the medium term unless a employment index increased 1.9% points figures where in January 2013 measured large pre-commitment is obtained from from the previous December quarter. just 2.0%. The catalyst behind the rise an inbound Government tenant. These results are reflected in business since 2013 was the completion of the new ATO building on Kembla Street in count numbers for the Wollongong CBD, Rents and Incentives where through either relocation to the late 2013, thereby leaving their 5,700m² backfill space at 93 Burelli Street vacant. CBD, new business start ups or Elevated vacancy rates and subdued However, with the recent announcement businesses taking on more workers, the tenant demand prior to 2015 has meant that the State Emergency Services (SES) number of employing white collar that rental levels in Wollongong have businesses grew by 19 over the two years will relocate to the former ATO building in early 2017 (from a smaller occupancy at remained stagnant in recent years. to June 2015, the majority of which were 6-8 Regent Street), the overall vacancy Currently, A-Grade gross face rents for IT related businesses. average $425/m² with a broad range of rate will significantly reduce once the lease commences. With the current $390-460/m² (see Figure 10), while gross Office space in the Wollongong CBD is face rents for secondary assets range provided through a number of dedicated 5,700m² vacancy representing 90% of all from $280-$380/m². Of note, A-Grade stand alone office buildings and shared A-Grade vacancies within the CBD, the A-Grade vacancy rate is expected to gross face rents are considerably below main street office formats in conjunction that of major non-CBD Sydney office with retail and other uses. In total, the decline to around 1.0% in early 2017, markets, currently discounted by up to Wollongong CBD has 154,119m² of total thereby signifying a period of modest rental growth. 22% depending on comparable market office space (January 2016), with A-Grade

Wollongong CBD Employment Wollongong Office Stock & Vacancy, Wollongong Net Absorption by Growth & Office Demand by Grade Grade & Total vacancy White Collar Industries (2011-2031) 2008-2016, at January 12 months to January, 2009-2016

% 900 16,000 155 '000s 18 10,000 % 14

800 16 150 8,000 12 14,000 14 700 6,000 10 145 12 600 12,000 10 4,000 8 500 140 8 2,000 6 400 10,000 135 6 300 0 4 4 130 200 -2,000 2 8,000 2

100 125 0 -4,000 0

- 6,000

Jan-14 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-15 Jan-16

Jan-12 Jan-09 Jan-10 Jan-11 Jan-13 Jan-14 Jan-15 Jan-16 2011-2016 2016-2021 2021-2026 2026-2031 Jan-08 TOTAL STOCK A-GRADE NET ABSORPTION WOLLONGONG CBD EMPLOYMENT GROWTH (LHS) A-GRADE VACANCY RATE (RHS) SECONDARY NET ABSORPTION WOLLONGONG CBD OFFICE DEMAND - M² (RHS) TOTAL VACANCY RATE (RHS) SECONDARY GRADE VACANCY RATE (RHS)

6 WOLLONGONG INSIGHT JUNE 2016 RESEARCH

(see Figure 10). Incentive metrics differ somewhat by building and owner, Wollongong Major Industrial however broadly range between 10% to Precincts 15% for A-Grade assets. Looking ahead,

some moderate upward pressure on rents is expected over the next 12-24 months, particularly for prime grade assets, off the With the region increasingly recognised as back of modest employment growth and a strategic centre for the broader Illawarra the anticipated outlook for the vacancy and NSW region through Port Kembla, the rate following SES’s recent commitment. local industrial market is currently

experiencing a period of growth. This period of growth follows the significant Average A-Grade Gross Face Rents economic readjustment that the Illawarra Wollongong Vs Selected Major Non-CBD Sydney Office Markets ($/m²), June 2016 region experienced over the past decade, accentuated by BlueScope Steel’s 2011 $600 announcement to close one of its steel $560 smelters. However, both investment and leasing activity into the local market has $520 been further heightened by the favourable $480 conditions currently being experienced in

$440 the Sydney industrial market with a growing number of buyers looking further Industrial Land $400 afield for investment opportunities.

$360 With industrial take-up and locational $320 approximately $55.5 million throughout

preferences for businesses heavily 2015, however a large number of sales Park Rhodes influenced by port related activities,

Burwood have also been recorded in the sub $2

Macquarie

Homebush Parramatta Wollongong industrial space in the Wollongong region million range. This result was underpinned GROSS FACE RENT RANGE ($/M²) AVERAGE NET FACE RENT ($/M²) is primarily located around Port Kembla, by the October 2015 sale of 34 Reddalls Unanderra and Wollongong (see Map 2). Road, Kembla Grange for $20.3 million, Outside of these areas, industrial activity is reflecting an initial passing yield of 7.0%. Sales and Investment scattered, although with a focus along the The 141,100m² site was acquired by Activity Princes Motorway, to the east of Lake Growthpoint Properties Australia on a 15 Illawarra. year lease. At present, average core market

As competition for core assets nationally yields range from 8.0% to 10.0% for A- Over the past 12 months, the bulk of increased exponentially over the past 18 Grade assets, however upper prime assets industrial leasing activity in Wollongong months, and as yields fell, purchasers have with long WALEs are trading below this has stemmed from transport and logistics been increasingly moving up the risk range. Secondary assets are requiring an groups, while there has been moderate curve. This has resulted in demand spilling elevated risk premium where average core demand from traditional manufacturing over into non-CBD and major metro market yields currently range from 9.0% to groups. However, with the outlook for markets, and Wollongong is beginning to 11.0% depending on location and quality. business confidence remaining positive, as benefit from this demand. Since January a net 7.4% of local manufacturing firms 2015, Wollongong office sales ($5 million expect trading activity to improve +) have totalled $33.8 million. Average A-Grade Industrial Core throughout 2016, coupled with positive market Yields (%) overflow demand from Sydney and local Wollongong Vs Sydney Industrial Regions, June Investment demand has continued into employment growth, leasing demand is 2016 2016, highlighted by the most recent $10+ expected to gain further momentum during 10.0 million transaction in the Wollongong CBD 2016 and 2017. At present, industrial net 9.5 - the six storey, fully leased, Australian rents in Wollongong broadly range 9.0 Hydrographic Office Building, tenanted by between $110-$130/m² for A-Grade the Department of Defence until 2021 (5.6 8.5 premises and $80-$115/m² for secondary year WALE). The 3,821m² building at 8 8.0 options. Station Street sold in April 2016 for $13.6 7.5 million at a net passing yield of 10.1%. Notwithstanding patchy leasing conditions, 7.0 Investment yields in this market diverge investor demand has been strong over the 6.5 significantly based on quality, profile and past 12 months, with the low interest rate size of asset. On average, core market 6.0 environment and high yield metrics on yields broadly range from 9.0% to 10.0% 5.5 offer in comparison to Sydney being the for prime and 9.5% to 11.0% for

primary drivers. Sales volumes ($2+ Sydney

Northern Sydney

secondary, having both remained relatively Sydney

Outer West Outer

South West South

Wollongong

Inner Central Inner West Sydney West

million) in the Wollongong LGA totalled Sydney South elevated since the GFC.

7

RESEARCH & CONSULTING Matt Whitby Group Director Head of Research & Consultancy +61 2 9036 6616 [email protected]

Paul Savitz Director +61 2 9036 6811 [email protected]

Luke Crawford Senior Analyst +61 2 9036 6629 [email protected]

KNIGHT FRANK ILLAWARRA Ben Mostyn Managing Director +61 2 4227 2111 [email protected]

James Mulcair Director +61 2 4227 2111 [email protected]

Matt Borg Director +61 2 4227 2111 [email protected]

Rob Anstee Director +61 2 4227 2111 [email protected]

Knight Frank Research provides strategic advice, consultancy services The Illawarra-Shoalhaven area includes the four local government areas (LGAs) of Kiama, and forecasting to a wide range of Shellharbour, Shoalhaven and Wollongong. clients worldwide including developers, investors, funding Abbreviations & Glossary: organisations, corporate institutions Core Market Yield: The percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for and the public sector. All our clients property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital recognise the need for expert expenditure, current vacancies, incentives, etc.) independent advice customised to NSW DP&E: NSW Department of Planning & Environment their specific needs. ABS: Australian Bureau of Statistics BTS: Bureau of Transport Statistics NIEIR: National Institute of Economic and industry Research

© Knight Frank Australia Pty Ltd 2016 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the prepara- tion of the information, analysis, views and projections presented in this report, no responsi- bility or liability whatsoever can be accepted by Knight Frank Australia Pty Ltd for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank Australia Pty Ltd in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank Australia Pty Ltd to the form and content within which it appears.

Knight Frank Research Reports are available at KnightFrank.com.au/Research