AN increase in population density and growth in holiday accommodation options, with an uplift in both services and food-related offerings has benefited the local Palm Beach retail market, according to Ray White’s latest Between the Lines* commercial research.
Ray White Commercial has conducted a survey of this retail precinct which includes 159 shop fronts with a total estimated NLA of 19,235sq m.
“Occupancy levels have recorded sound results in this region with a vacancy of just 4.38 per cent,” said Ray White Head of Research Vanessa Rader.
“The retail mix for this area highlights the change in demands from consumers with service offerings representing the largest proportion of occupiers.
“Major uses include beauty-related services followed by medical, with more traditional services such as banks having reduced their holdings in recent years, making way for gyms and other health-related retailers which cater for both local and visitor trade.
“Food retailing is a major drawcard for this location, being home to many popular cafés and restaurants, these cater for close to a quarter of the total retail space in Palm Beach.”
Ray White Commercial GC South Sales and Leasing Agent Tara Imlach said Palm Beach had gone through a period of high activity over the last five years.
“New apartments have provided new ground floor retail accommodation, while other developments have seen the office stock levels increase, bringing a new divide in quality of accommodation for the commercial markets,” Ms Imlach said.
“Retail rents in this location can vary depending on the size, quality and configuration of the space. Recent transactions have resulted in net face rents ranging from $450psqm to $600psqm, with smaller, modern facilities commanding a higher rate.
“This has not gone unnoticed by the investor market with sales during late 2019 achieving yields in the 5.85 to seven per cent range, depending on quality and lease covenant.
“Our survey identified a large volume of office stock in this precinct, made up of a mixture of new, modern office suites and older style above-shop or converted office premises.
“Total office NLA for Palm Beach has been recorded at 13,398sq m with an estimated vacancy rate of just 3.28 per cent, well below the rates achieved in more traditional office markets of Surfers Paradise, Southport or Bundall.”
*Ray White Between the Lines – Palm Beach QLD Commercial Market – January 2020.