Infrastructure spending has long been a driver of commercial property in the Riverina region of NSW and is driving markets to new heights, according to Craig Tait, Principal of Raine & Horne Commercial Wagga Wagga, who adds that multiple projects are underway across the Riverina region.
The Riverina Intermodal Freight and Logistics Hub will provide large lot industrial land for manufacturing and logistics businesses.
The Energy Connect project is set to generate 1,500 jobs across regional NSW – and Wagga Wagga is central to the project’s completion.
In addition, Craig says, “The Department of Defence has a Riverina Redevelopment Program underway, which will provide $1 billion worth of new or upgraded facilities over the next five years. Two Wagga Wagga ADF bases – the Blamey Barracks at Kapooka and RAAF Wagga, will be major beneficiaries of the proposed spend.”
A “major positive” for commercial property
Not surprisingly, Craig believes the Wagga Wagga economy will get a tremendous lift from these projects.
“It’s not just about the massive sums being spent on local infrastructure,” explains Craig. “A likely flow-on effect is a jump in Wagga Wagga’s population based on the workforce needed to complete these projects.”
The upshot, according to Craig, is “A major positive impact on the commercial market in Wagga Wagga.”
Vacancy rates below 5.0%
Already the team at Commercial Wagga Wagga are reporting a huge increase in demand for industrial stock, and this is expected to spread to retail and office assets as the infrastructure projects ramp up.
Strong demand is pushing vacancy rates down to 5.0% in both the industrial and retail markets. However, it is yields on prime space that are drawing in investors.
Retail space is generating yields of 6.0%, rising to 7.5% in the industrial market and up to 8.0% for office space. Yields on office and retail stock are expected to rise.
Wagga Wagga has been identified by the NSW state government as an area of ‘significant growth’, and data from Wagga Wagga City Council shows the population is forecast to grow from 70,339 in 2022 to 80,984 by 2036.
Much of this population growth can be attributed to Wagga Wagga’s diverse local economy, which includes defence, tertiary education and logistics. Unusually, for a regional hub, agriculture makes a relatively modest contribution to the local economy, making Wagga’s economy highly resilient to climate-driven impacts.
According to Wagga Wagga City Council, vacant industrial land in Wagga Wagga is estimated to cost one-tenth of equivalent land in metropolitan Sydney.
“This is a clear indicator that Wagga Wagga’s commercial property market offers outstanding value to investors and owner occupiers alike,” says Craig.
For all your commercial property sales and leasing needs in Wagga and surrounding areas, contact your Raine & Horne Commercial Wagga on 02 6925 8322 today.