Tourism boom sees development of Hobart CBD gaining momentum

11-Dec-2017 11:09:03

Increased activity of Tasmania’s tourism sector is giving Hobart’s CBD an unprecedented surge in development activity.

Hobart is due to see development of new hotels as well as experiencing an increase in developers’ appetite for residential sites in the city.

View from above the Harrington Street site.jpgA local developer recently purchased a 1,705 m2 site in Harrington Street through NAI Harcourts for $1.65m.

Warrick Hobart, Director of NAI Harcourts Hobart says, “with the Hobart CBD already responding positively to increased tourist visitors with exciting new hotels, restaurants, retail shops opening nearly every week, the future of Hobart is looking bright”.

The ongoing strength of the Hobart residential market has also seen a rise in prices for new CBD and fringe apartments. The recently completed Linear Park development in Collins Street has seen apartment re-sale increases of up to 30% with a two-bedroom apartment in this development selling for $645,000 in early 2017.

“These benchmark sale prices combined with strong Hobart tourism visitor numbers have encouraged medium density residential developers to get in early and purchase sites for redevelopment,” says Hobart.

The Melbourne-based ‘Giants Developments’ has purchased 126 Bathurst Street, Hobart and is planning to build an innovative seven-storey development of 30 apartments with two floors of ground floor commercial called ‘The Commons Hobart’. Apartments range in price with one-bedroom apartments up to $389,000; two-bedroom apartments up to $630,000 and three-bedroom apartments up to $825,000.

A local building owner and developer has recently purchased a 1,705 m2 site in Harrington Street Hobart through NAI Harcourts for $1.65m. The zoning will allow a mixed-use development of ground floor commercial with potentially up to 40 apartments on the site.

Increased enquiries from developers for suitable inner-city development sites coincides well with several building owners of vacant or partially vacant C and D grade Hobart office buildings considering their sale options as CBD and fringe office vacancies increase.

This increasing vacancy in the lower grade buildings follows a ‘flight to quality’ by tenants attracted to better CBD buildings by increasingly aggressive lease incentives. These are offered by building owners looking to fill the gaps left by state government tenants departing to the new Parliament Square office building, which has recently added an additional 16,275 m2 of net lettable area to CBD office market.

Written by Susie Laery

NAI Harcourts, Tasmania, Commercial Property, NAI Market Leader