The proponents of yet another high-rise office building in central Newcastle are confident they can find a niche in the market.
Wangi Wangi developer Joel Castle submitted a development application to City of Newcastle last week proposing a nine-storey building at 653 Hunter Street containing 3000 square metres of office space.
The project includes ground-floor retail, three levels of parking and five storeys of office accommodation in a city seemingly inundated with new and proposed commercial space.
The proposed building is a block away from site works for the 13,600-square metre Birdwood Business Centre at 723 Hunter Street.
DOMA Group's just completed 15,000-square metre government office building on the Store site in Stewart Avenue has four vacant levels, though the Newcastle Herald understands a lease deal is imminent.
The movement we've had so far is just shuffling the deck chairs within Newcastle.Newcastle developer
Mr Castle's development pushes the pipeline for new CBD office space supply beyond 30,000 square metres.
One developer told the Newcastle Herald that it was difficult to understand where tenants or buyers for all the new office space would come from.
"No one from Sydney is relocating here that I know of," the developer said. "The movement we've had so far is just shuffling the deck chairs within Newcastle."
Property agent Matt Kearney said the proposed building at 653 Hunter Street would differ from most other office redevelopments in Newcastle as it was being sold as 31 small strata suites rather than leased.
He said the developer hoped to attract small and emerging businesses who wanted to own a space rather than share offices.
The development application says the project will involve knocking down all but the facade of the existing two-storey building on the block, which is beside the former Empire Hotel site on the corner of Steel Street.
The 32-metre building is well below the 60-metre height limit for the site but slightly above the 3:1 floor space ratio which applies to blocks of land under 1500 square metres.
The Property Council reported in February that Newcastle had one of the strongest metropolitan office markets in Australia with a vacancy rate of 7.8 per cent.
The vacancy rate for A-grade office space was 3.1 per cent in January, up from 1.4 per cent a year earlier.
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