Over the last few years, there has been a dramatic shift in the Gold Coast commercial market with COVID-19 and lockdowns, causing office vacancies through most of Australia’s cities to rise. However, the impact we have seen on the coast has caused an unusual run-on effect that has stimulated this sector.
At the start of 2021, we saw a new wave of ‘interstate migration’ hitting the Gold Coast due to the city’s eased restrictions and from those seeking a permanent lifestyle change. This population growth has dramatically affected the commercial market, driving up more demand for office spaces as businesses move in.
The Property Council Office Market Report for 2021 showed the Gold Coast’s overall office vacancy rate decreased from 14.3 per cent in January 2021 to 11.3 per cent in July of 2021.
This increase in the demand for office spaces is largely due to work habits, as we have not had to experience as many lockdowns as our interstate neighbours. As a result, workers have been able to continue attending the office as usual, keeping these spaces active. While decentralisation, together with the strong population drive from interstate migration, has grown new business opportunities around the Gold Coast.
The six months leading to August 2021 has been outstanding for the commercial office market seeing an uptake of 12,413sqm of space, a record that has not been witnessed since 2006, according to The Market Update.
A high volume of sales for freehold office buildings and spaces throughout the key commercial precincts has also been a large contributor to the high absorption rate. Many of these purchases are B and C grade office buildings where the buyer has intended to upgrade and refurbish the space. As a result, we predict that vacancy rates will continue to drop, and the quality of office space will increase as investors and owner-occupiers continue to improve their assets.
Kollosche Commercial agent Adam Grbcic says that the strongest demand lies in these B and C grade office spaces for the moment.
“One of the most appealing factors of older style office buildings is the generous car parking ratio they offer, compared to newer buildings.”
“Older buildings also give the occupiers the opportunity to reconfigure and remodel to suit the modern requirements and layouts for businesses,” says Adam.
Here are a few of the vacancy decreases of Gold Coast suburbs that saw the most change from January 2021 to July 2021:
· Broadbeach – decreased from 10.4 percent to 9.6 percent
· Bundall – decreased from 8.5 percent to 7.2 percent
· Robina- Varsity Lakes – decreased from 18.8 percent to 12.5 percent
· Southport – decreased 14.2 percent to 12.3 percent
· Surfers Paradise – decreased from 14.3 percent to 12.5 percent
This period for the Gold Coast office market has been surprisingly successful. The ongoing demand caused by a growing population has helped businesses and commercial spaces thrive with an increase in enquiry, demand and rent. The continued demand looks promising as the 2032 Olympic Games have been secured, predicting an increase in development, business, and population, all of which will benefit the commercial sector.
If you would like to have an informed discussion around how to best leverage your commercial asset, get in touch with our Commercial sales, property management or leasing experts today.