Gold Coast Office Market Continues to Improve
The Gold Coast office market has enjoyed its most favourable period for almost a decade with the local economy strengthening on the back of investment from the 2018 Commonwealth Games, says Ray White Commercial.
Ray White Commercial Head of Research, Vanessa Rader, said in the six months to January 2017, there had been 10,088 sqm of office space taken up on the Gold Coast, reducing the vacancy rate to 12.2 per cent – the lowest level since July, 2008.
“Confidence and optimism is surrounding the Gold Coast,” Vanessa Rader said in the Between the Lines Gold Coast Office Market Report February 2017.
“Low interest rates, tight yields in residential and other investment classes is resulting in investors diversifying and spreading their risk and this has had a significant impact on the broader Gold Coast commercial market, in particular the office market.”
Ray White Commercial Gold Coast Office Leasing Specialist Renee Hughes said Robina/Varsity Lakes continues to offer the least available stock with vacancy recorded at 6.9 per cent, while Bundall, Surfers Paradise and Southport have all continued their downward momentum, recording vacancy rates of 14.1 per cent, 18.4 per cent and 13.2 per cent respectively.
“The churn of tenants over the last 12 months has been amplified by many occupiers looking to increase their size requirements as well as new major national businesses looking for new premises,” she said.
“There has been a sizeable increase in tenants seeking over 300 sqm which was more difficult to move mid-2016, highlighting improved trading conditions and optimism in the market.
“There has been a growing trend by owners increasing their capital expenditure into their assets which has had a positive impact on attracting and retaining quality tenants, which can be felt in the overall decline in vacancies across the Gold Coast.”
Ray White Commercial Gold Coast Commercial Sales Specialist/Team Leader Steven King said after around five years of capital values across the office strata market showing a clear decline, the last two years have seen this trend reverse.
“Capital values have increased 2.9 per cent across the broader Gold Coast office strata market compared to average 2015 results,” he said.
“Surfers Paradise/Broadbeach has yielded the most impressive results increasing 22.11 per cent to average $3,633 per sqm and Southport is up 12.53 per cent, averaging $3,495 per sqm.
“Robina/Varsity Lakes continue to be the most expensive region with an average growing close to 5.0 per cent over the year to $3,968 per sqm. Bundall remains the most affordable region averaging $2,355 per sqm and Burleigh/Coolangatta is at $2,530 per sqm. However, this represents the most limited sales turnover and historically shown the most fluctuation.”