What will Newcastle Become?

The last month has seen some tremendous announcements by the NSW Government that will have a lasting impact on the long term stability of Newcastle City.

September saw the University of Newcastle enter into discussions with the Government about acquiring a further 2 ha of land in (3) parcels behind Wright Lane and along the rail corridor.

On a Real Estate study tour of the USA’s west coast in 1996, I came back full of enthusiasm for the dormant potential Newcastle University offered this region if it linked itself to business and business development. At that time I offered the University the entire Warabrook Industrial Estate as an incubator site only to be met with; “We are a pure education facility we do not contaminate ourselves with links to business”.

Time has marched on and our education facilities, as a nation, take on more and more of the look of the U.S.A style campuses, especially in regard to student debt. In the U.S.A, towns centre themselves on Universities and Colleges and in the cities, businesses centre themselves around the Universities and Colleges, the commerce created is enormous. However Newcastle requires a critical mass of faculties to make this succeed in the city centre and the additional land must  be guaranteed unequivocally to the University.

You see, all of the announcements by the Minister thus far are full of exit clauses “under investigation” – “explore the opportunities” – “developing the relationship”. With 2,000 to 3,000 apartments in the pipe line and NO demand from outside the region for more office space, the University is exactly what the city needs to be built on this land.

Another announcement concerned a cruise terminal. If you ever wondered what such a beast can do for a town take a look at the once sleepy coastal town of Kusadasi in Turkey. It’s port was developed in 2004 at a cost of EUR$24.3m it now hosts 648,000 visitors a year and if they were to spend just EUR$100 each that’s $64.8m to the economy day in day out, year on year.

Then there’s the V8 Super cars that will expose our city to a wider and more varied audience than ever before. The economic numbers are all estimates as to what will be brought to the region however it’s the wider publicity that will be the ongoing and more tangible effect rather than the shot of cash race day brings.

There are some things that are not going to plan and that is the NSW Government’s lack of support for manufacturing. I’ve just spent the weekend in Melbourne and “Made in Melbourne for Melbourne” and “made for Victoria by Victorians” hits you in the face every time a new tram glides past. This message drives home the fact that the Victorian Government is fighting for jobs and are proud to do so. While in NSW the trams or light rail goes to Korea and our local bus plant is shut down only months after the current state government was elected for their first term with 250 local jobs going to Victoria.

We may be getting a light rail but hell it would have been nice to see a sticker on the side “made in Newcastle for Newcastle”.

Still the big winner on the real estate front is anyone looking to sell an investment property or even a vacant building close to the city. We recently sold a commercial investment property in Dick Street Newcastle for a 5.67% yield with (11) bidders – (10) of which are still looking to buy.

Smaller buildings in the Wickham/Maryville area are also proving hot as people look for that elusive New York style warehouse to live in.

There have been some large commercial lease moves a foot with the tax office filling up – the 1,650m2 floor plates proving popular but not to any new businesses just the usual shuffling of the decks as the bankers, insurers and NSW Government change places.

Larger industrial leases are still scarce however there is quite a trade occurring in the stock up to 500m2.

The question at the start was “What will Newcastle Become?” – I’m not sure but what I am sure about is the injection into tourism and especially tourism infrastructure along with the promise (although shaky) to bring further University faculties into the city will change the town more than any misguided poorly orientated tram track.

The Government giveths and the Government takeths! But after another trip to Melbourne I still like the mixed running tramways and strip shopping, lets hope the activation of the Hunter Street strip is truly what the NSW Government is chasing.

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