Barwon Business Park already 50% sold

13 December 2023

Developer Phil Petch says his Geelong development is reminiscent of Richmond’s Cremorne before it took off and became known as Silicon Yarra, a hot spot for start-ups and tech giants from MYOB and SEEK to Tesla and Carsales.

Petch’s IDS Developments has sold more than 50 per cent of his office park development, Barwon Business Park, on the banks of Geelong’s Barwon River in Newtown, one of the cities by the bay’s most prized and accessible suburbs.

“It’s Richmond, Cremorne, 20, 30 years ago. But the thing is, where it’s different, you’re right on the Barwon, and there’s nowhere else it can happen on the river,” he says.

A $180million high-density residential development is currently being planned just around the corner from the site, which he hopes gets approved.

Petch says his Barwon Business Park has responded to a dire shortage of strata offices in Geelong. “I tried to find some empirical data to prove it, but there’s nothing available. So, it’s a matter of talking directly to businesses. I found many leaseholds because of Geelong’s history with manufacturing and its early textile industry days, but it’s all leaseholds. If you’re a small, medium-sized business, you can’t own strata in Geelong.”

He says owner-occupiers are interested in buying through their self-managed superannuation fund because of the significant tax advantages offered.

“But the opportunity to own your private A-Grade commercial premises hasn’t been available previously. It’s getting to the stage where many Geelong SMEs’ are operating in sprawling Edwardian homes, where you may find ten accountants working together, and it’s not good for the business or their staff as they’re dated C-grade stock,” he explains.

He says these small businesses in inefficient old buildings were paying through the nose for energy costs such as cooling and heating. “No one likes to work in rundown buildings. One thing we’ve found with the Barwon Business Park is the surrounding amenities; it’s close to home and a Newtown address.”

“I always knew there was a demand for strata office in Geelong, but it was about finding the unique site. We’re right on the Barwon River in Newtown, which is Geelong’s best postcode. It’s an elevated site that is so good that it should be residential. However, current zoning only allows this in the short term. The council have plans to see the entire area rezoned as mixed- use, which would be an excellent outcome for the neighbourhood given its proximity to the river, parkland and Pakington Street shops and galleries.

Petch says the development is a joint venture with the existing land owner and outside investors. He says buyers in the Business Park have taken comfort in the quality of his earlier development of the dilapidated “Ritz Flats” in Geelong’s Bellarine Street.

He transformed the Down on Its Luck heritage hotel into the stunning R Hotel, a nine-storey, 110-apartment development steps from the Eastern Beach.

“The “Ritz Flats” has been an eyesore in Geelong for the past 20 years. It was such a rundown, terrible building, and I’m very proud of what we have been able to create on the site.” “We bought it and actually did it,” he says.

Petch chose Mark Gratwich Architects, a local Geelong architect, for the Newtown project. He is a big believer in using and supporting local Geelong businesses. “Building costs are so expensive, you’ve got to do things smarter. Mark has designed efficient buildings whilst retaining architectural elements that give the buildings an edge.

“There are so many risks in this game as it is. If you’ve got good architects and consultants, you can trust who have performed well in the past, you use them again.”

Petch says achieving good sustainable building outcomes pays off. “We’ve made extensive use of solar panels and have taken advantage of cross ventilation and the temperature inversion that comes from waters of the Barwon River. People, especially those coming from inefficient buildings, want to see this. As developers, we must ensure we have sustainable buildings.”

He says the bushland setting is also highly prized. “One of my pet hates with commercial developments is poor or non-existent landscaping. At Barwon Business Park, we are planning an extensive indigenous landscape that links the bush to the offices; we are making the most of the natural environment, again making it a destination where employees want to come to work,” he says.

Petch says they have sold ten offices, half of the offer. “We are finding that our buyer’s decision-making has slowed down. The demand is still there and coming through, but closing the deal takes longer. As you can imagine, relocating offices is a big decision, but demand is definitely there.” He says there is much interest from younger businesses looking for accommodation that reflects their values.

Each office has its own terrace and views over the Barwon River or nearby parkland. “You can take your clients up to the terrace and enjoy the view, it’s almost like a hybrid residential product.”

Petch says he is also working on a project in Shepparton. “Shepparton has gone under the radar. It’s one of those places where I was amazed by the amount of manufacturing and food processing that’s going on. It also has a good vibe and is a very multicultural community–based city. It’s just great. It feels like Brunswick in the bush and still only a two-hour drive from Melbourne.”

Barwon Business Park’s SME office development on the banks of the Barwon River ranges from 100 to 340 m2 and a price point between $1.4million to $3.2million.