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Commercial property leaders in the Northern Territory are expecting the region to benefit from its incoming infrastructure pipeline.
Not since the construction of the Ichthys LNG facility has Darwin seen such an investment into its long-term infrastructure program, according to Herron Todd White managing director, Will Johnson.
He believes a swathe of new construction works will bring employment-generating opportunities to Darwin and surrounds, listing off a record $5 billion in road funding committed by the NT government, and $6 billion worth of investment from the Australian and US governments for new and improved defence assets.
In addition, Darwin is set to see $1.5 billion put towards the development of commercial-grade facilities across the city that are suited to resources and manufacturing enterprise, as well as benefit from the recently announced $4 billion worth of federal and territory-based funding towards housing in remote communities across the next decade.
Johnson flagged these programs as following on from the recent $250 million expansion of Charles Darwin University, as well as coinciding with investigations into the feasibility of transporting gas from Tennant Creek to Darwin.
And while the city has always seen surges and drops in demand, the managing director is of the belief that the breadth and diversity of new programs will provide resilience in the local market.
Pointing out that the Darwin market “hasn’t experienced the capital growth that other capital cities have seen,” he sees Darwin as “very accessible for investors” from an affordability perspective.
“Good-quality industrial assets are transacting on gross yields of 7.5 per cent to 8 per cent, offering considerably higher returns than you’d find for comparable properties in the eastern capital cities,” Johnson said.
“Even with the works program in the pipeline, the supply of industrial property hasn’t kept pace. There will be demand from gas and defence-related companies which will have an impact on the market. For a couple of million dollars, you can purchase a good-quality industrial asset in Darwin.”
According to local agent and director of LJ Hooker Commercial North NT, Lee Doyle, the infrastructure outlook is already catching the eye of keen investors.
He has seen a pick-up in enquiries across the latter half of 2023, with the expectation that enquiries will continue to grow across the coming year, stating: “The infrastructure program will obviously generate employment in the territory during delivery and add efficiencies to private operations once completed.”
“Darwin’s always offered attractive returns, but economic activity is providing investors with greater confidence in the city and wider region,” he shared.
Also weighing in, his fellow director Ryan Doyle explained that many businesses are positioning themselves to capitalise on the public investment in the region.
“For investors who are looking to enjoy excellent returns in a rising economy, Darwin is a great opportunity in 2024,” he concluded.
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