Infrastructure drives commercial property demand

Large-scale developments, including Melbourne’s $30.5 billion Suburban Rail Loop, Brisbane’s $9.9 billion Gympie Road Bypass Tunnel and the Sydney to Newcastle high-speed rail line, are all underway to accommodate the nation’s surging population, which is expected to hit 31.5 million by 2035-36 according to the federal government’s Centre for Population. 

If successfully designed and constructed, infrastructure can boost local economies and provide sustainable business opportunities – and investors who do the market research stand to benefit at an early stage.

The Sydney to Newcastle high-speed rail line will be the first stage of a planned fast rail connection between Brisbane and Melbourne, with travel times from Newcastle to Sydney expected to be cut to one hour and from Gosford to Sydney to 30 minutes.

Although it was only formally announced by the federal government in March, agents are registering early interest from investors. 

“We believe the fast rail announcement is boosting commercial and industrial sentiment,” says Brad Wallace, principal of Raine and Horne Commercial, Newcastle.

“We are already seeking increased interest from Sydney-based companies looking to relocate to Newcastle and are therefore seeking space. The key driver is confidence that connectivity will improve, helping to reduce travel times and freight costs.

Both government and private-sector investment in Gosford are moving ahead of the curve in anticipation of what the project could mean for the regional city. The University of Newcastle’s new Central Coast campus opened this year, and a new 130-room Voco hotel developed by IHG Hotels and Resorts and property developer Aland. 

In Coffs Harbour, a new truck stop has been positioned on the Pacific Highway to take advantage of the $2.2 billion Coffs Harbour Bypass. Scheduled for opening at the end of the year, the bypass will reroute the Pacific Highway away from four existing northbound service stations in Coffs Harbour and effectively eliminate the nearest competition.

“It was built and constructed a couple of years ago in contemplation of the bypass infrastructure,” says Tom Moreland, partner at Stonebridge Property Group. “Ultimately, that traffic will now flow towards this particular service centre.”

In Melbourne, demand has increased across areas set to benefit from the Suburban Rail Loop. In Burwood, Charter Hall’s convenience retail fund seized on Burwood One Shopping Centre in December last year when it bought the site for $210 million. The mall’s location will benefit from the first stage of the rail tunnel – the Suburban Rail Loop East connecting Cheltenham to Box Hill.