Population growth, economic diversification and infrastructure investment are driving demand across the nation’s regional centres, and Wollongong is emerging as a leader in the pack. Photo: Region Illawarra.
The Illawarra residential market might have finally succumbed to the broader national downturn, but its commercial counterpart appears to be playing with a different set of rules — and winning.
Commercial transaction volumes across regional Australia performed strongly last year, and according to Knight Frank’s latest Australian Regional View, Wollongong has emerged as one of the country’s standout markets.
The city’s population is forecast to expand by 16 per cent over the next decade, cementing its status as one of Australia’s fastest-growing urban hubs.
In 2025, Wollongong recorded nearly $250 million in commercial property transactions — a 60 per cent surge year-on-year and its highest volume since 2021 — continuing a steady upward trajectory in capital deployment across the region.
Retail assets dominated activity at $192 million, followed by industrial (circa $29 million) and office (circa $28 million). However, key fundamentals point towards accelerated growth in the industrial and office sectors.
While traditional pillars such as mining and manufacturing remain key economic drivers, there’s been a distinct structural pivot towards service industries, specifically professional services, construction and healthcare. Residential development reflects this momentum: the RLB Crane Index currently counts 25 cranes on the local skyline — more than triple the Sunshine Coast.
This shift is reinforced by the expansion of the University of Wollongong (UOW), where student enrolments doubled, adding 17,400 students between 2019 and 2024.
Future industrial growth is expected to be anchored by BlueScope’s $2 billion Land Transformation project in Port Kembla. The initiative will redevelop 200 hectares into an advanced manufacturing, logistics and research precinct dedicated to clean energy and technology.
Local industrial assets are also uniquely positioned to capture demand from Western Sydney’s growing south-west corridor and the upcoming Western Sydney International Airport, opening in October — a key catalyst expected to drive transport and logistics absorption.
Knight Frank Senior Economist and report author Alistair Read said Wollongong was increasingly attracting investor interest as regional commercial property markets mature.
“The perception of Australia’s regional commercial property markets has shifted decisively over the past five years, with increased investor confidence in the long-term outlook,” he said.
“Once viewed primarily as a high-income but lower-growth play for yield-hungry investors, cities such as Wollongong are increasingly being recognised as genuine growth markets underpinned by structural drivers of demand.
“Investors are increasingly recognising that many regional and metropolitan centres now possess the economic scale, population growth and industry diversity required to support long-term commercial property performance. Wollongong is one of the strongest examples of this trend.”
Knight Frank Illawarra Managing Director Ben Mostyn said Wollongong’s unique combination of lifestyle, connectivity and value was attracting businesses and investors, calling it “one of Australia’s most compelling regional growth stories”.
Knight Frank Illawarra Head of Sales Ben Churven agreed, pointing to notable marquee transactions this year.
Among them was the former Cleary Bros site at 37-39 Five Islands Road in Port Kembla, which fetched $15 million in May, beating pre-sale forecasts. Another 5-hectare industrial holding on Canterbury Road in Kembla Grange secured $14 million in July, also outperforming expectations despite being a “complex site”.
“We all saw the massive injection of people who relocated to the region during COVID. That brought with it a spike in local businesses and, gradually, people returning to the office, getting more local jobs, driving a decrease in office vacancies over time,” he said.
“Now we’re seeing investment in A Grade offices spaces, like the redevelopment of Lang’s Corner, and as people leave older buildings to occupy those spaces, I think we’ll see those buildings become gentrified, mixed-use, incorporating residential, hotels and so on. All that movement is great for the region.”
