The Gold Coast commercial market is seeing a shift in buyer behaviour, but it is not only premium, fully- leased assets that are attracting attention. 

In the latest Grbcic Duo podcast, Kollosche commercial agents Adam Grbcic and Tony Grbcic explain why many investors are now actively targeting assets that were previously overlooked. 

“With interest rates increasing, buyers need stronger returns to service debt,” Adam says. “So, what we are seeing is more investors looking for ‘Cinderalla’ assets, where they can control the outcome and create that uplift.  

“Assets with a history of vacancy, outdated presentation, deferred maintenance and a poor tenancy mix are no longer automatic deal breakers.” 

Adam says, historically, properties with vacancy issues or ageing presentation were often viewed as higher-risk investments. Today, they are increasingly being seen as strategic opportunities, particularly as the supply of premium office space across the Gold Coast tightens. 

With construction costs continuing to escalate and new commercial development constrained, repositioning existing assets has become a practical way to create premium-grade space. 

“There is a severe shortage of quality office product on the Gold Coast at present,” Adam explains. “That creates an opportunity for investors to reposition buildings that were previously untenantable.” 

Offering an example of this trend in action, Tony cites Kollosche Commercial’s recent sale of 145 Scarborough Street in Southport, which changed hands for $6,525,000.  

He says the mixed-use asset suffered from significant vacancy, ageing infrastructure, and years of limited maintenance. However, the purchaser recognised the underlying value of its location and has implemented a refurbishment and leasing strategy designed to reposition the asset within the market. 

“He wasn’t really considering anything else. He specifically wanted a property in Southport where he could value-add,” Tony says.  

In today’s market, successful repositioning goes well beyond cosmetic improvements. Investors are increasingly focused on controlling the direction of the asset, from tenancy mix and leasing strategy through to presentation, functionality and occupier experience. 

That may involve undertaking warm shell upgrades, improving end-of-trip facilities, modernising communal areas or pricing incentives strategically to attract stronger tenants.  

“Controlling the asset is essential,” Adam says. “If you can create a better-quality product in a supply-constrained market, tenants will respond.” 

The result is a commercial market increasingly driven by strategy rather than speculation, which, for experienced investors prepared to actively manage and reposition assets, presents significant opportunity.

Although Adam warns, value-add investing is not for everyone. 

“There’s no guarantee you’re going to achieve the rentals you predict,” he says. “You’ve got to have the skill set and mindset to reposition a building properly.” 

Construction costs, labour shortages and rising holding costs mean feasibility is increasingly difficult to navigate. Investors need clear planning, reliable contractors, and a strong understanding of tenant demand before undertaking major refurbishments. 

For some owners, that may mean selling their asset rather than funding significant upgrades themselves. 

The Kollosche Commercial team is highly experienced in assisting owners and purchasers understand how to improve the value of an ageing or maligned asset. If you require advice, reach out to the team today.

To uncover more market trends, download the Grbcic Duo podcast.