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LUSTRE RETURNS TO GOLD COAST OFFICE MARKET

By Jared Hodge

Gold Coast’s office market is experiencing vacancy rates at 10-year lows as a result of improved business confidence, limited new supply and affordability.

The rate of 10.6 per cent is the lowest recorded on the Gold Coast since July 2008.

“The vacancy rate has fallen due to sustained and improved business confidence and no new supply additions since 2010,” said the Joint Managing Director of a local commercial real estate company.

“The uplift in the residential sector has also contributed to take up, with companies associated with this sector such as financial services, property based consultancy groups and legal firms either expanding or taking up new space.”

A commercial sales team leader said in general, the infrastructure on the Gold Coast, the Commonwealth Games and the affordability of rents had all contributed to vacancy rates falling.

“Because of the GFC, not much new stuff has been built and naturally, growth has occurred. It’s also been more affordable for people to lease space,” he said.

“Plus, everyone’s upgrading. Because the rents were more attractive and owners were throwing out more incentives, it was appealing for businesses to expand into bigger space or to take better space.

Seabank tower, a landmark building at 12-14 Marine Parade, Southport. Photo: Supplied

That’s contributed to the vacancy reduction as well.

“There is a fair bit of confidence, particularly from interstate people. You can just tell the Gold Coast looks good to them. They might not have been thinking about it before but they’re inquiring on it now.”

An international commercial agency office leasing executive said that he believed the total office vacancy in the Gold Coast would reduce to less than 10 per cent by the end of 2018.

According to an international real estate company , in the six months to January, most Gold Coast precincts experienced a decline in vacancy.

Surfers Paradise experienced the sharpest decline, where the vacancy fell from 15.1 per cent in July 2017 to 11.9 per cent in January.

This marked the sixth consecutive decline in Surfers Paradise, following a high of 29 per cent in July 2015.

Meanwhile, the office precincts of Robina and Broadbeach have the lowest vacancy rates of 7.2 and 6.6 per cent respectively.

“As a designated principal activity centre, Robina is a prime location for established and emerging health, education and technology businesses and we continue to field strong inquiry from the corporate and medical sectors as a result,” a Joint Managing Director of  a local commercial real estate company said.

“Businesses are drawn to Robina’s accessibility and staff amenity, which is crucial for staff attraction and retention. Robina offers public transport, M1 proximity, ample car parking and major retail services including Robina town centre.”

The newly refurbished office building, The PC at 36 Laver Drive, Robina, has been upgraded to capitalise on the continuing strong demand for office space. Leasing rates start at $350 a square metre net, and is being managed by local real estate company.

With continued business confidence likely and no new significant office buildings planned for construction in the Gold Coast within the next two years, Joint Managing Director of  a local commercial real estate company said she anticipated continued falls in vacancy and an uplift in rental growth.

Generally when the market reaches sub 10 per cent vacancy we tend to see discussion around new buildings escalate,” she said.

“However, the challenges for the market are that land prices have been pushed up on the back of the improvement in the residential sector and we are unlikely to see any new building in the more traditional precincts and further growth will likely occur in Robina and other locations such as Helensvale.”

A commercial sales agent said the remainder of 2018, and ahead to 2019, was looking positive.

“People have really identified that the Gold Coast is on the map and that there is some real value here in comparison to other capital cities,” he said.

“In years gone by the Gold Coast might have got some bad press and not taken seriously but we always knew that shouldn’t have been the case.

“People have identified now it’s actually a really nice place and not just for a Vegas-style holiday.”

‘We’re much happier’

Shenoa Gittins has moved to another office in Southport with better lease terms. Photo: Supplied

The opportunity to create a modern office fit out with better lease terms was among the enticements that helped ShenoaGittins make the decision to relocate her training services business to a new space just around the corner in Southport, Queensland.

Parking lots, street frontage, close proximity to cafes, shops and public transport helped seal the deal and the firm relocated premises at the end of April.

Ms Gittins, operations manager and co-owner of RAM Training Services, which offers accredited training to students, said the 305-square-metre space, featured four classrooms, a reception area and computer space.

“Another reason we chose this space was that it came with enough included car parking for our staff, which is rare for Southport,” she said.

“It was important to us that our team didn’t have to incur car parking expenses.

“We’re much happier in our new space – the owners occupy the upstairs area and have been fantastic to work with, it has a warmer, more RAM feel to it, and is a much more reasonable price compared to the previous space.”

Source: https://www.commercialrealestate.com.au/news/lustre-returns-to-gold-coast-office-market/

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