This article is from the Australian Property Journal archive
THE vacancy rate across the Gold Coast and Sunshine Coast office markets are struggling to absorb the excess surplus of space on the market, according to the Property Council.
The latest office market report shows the Gold Coast’s office vacancy dipped marginally over the six months to January 2012 from 22.4% to 21.8% whilst the Sunshine Coast vacancy eased by 0.8% to 13.6% over the 12 months to January 2012.
Queensland executive chair Kathy MacDermott said demand on the Gold Coast was driven largely by positive uptake in the Broadbeach area.
“The minimal change in vacancy ratings demonstrates that the Gold Coast office market is yet to see the benefits from several major projects announced or underway across the region,” MacDermott said. “Vacancy rates remain high, but the limited amount of stock forecast to come online over the next 12 months will give the region a chance to work through the surplus.”
“While Broadbeach recorded a significant decrease from 29.8% to 16.5%, attributable to demand of 3,945 sqm, Bundall and Surfers Paradise suffered a major increase in vacant stock. The Southport and Robina-Varsity Lakes markets experienced little change, with decreases of 0.9 and 0.8%, respectively,” she added.
In 2012 only 3,192 sqm is due to enter the market.
“The Gold Coast market has a long road to recovery,”
The Sunshine Coast saw 14,536 sqm of space come online, which increased the size of the market by more than 10% over the 12 months.
MacDermott said over this period, the Sunshine Coast also posted record high levels of net absorption (12,257 sqm) and withdrawals (1,570 sqm).
“The high absorption rate is solely attributable to the strong performance of the A grade sector, which experienced net absorption of 17,429 sqm over the 12 months to January. This take-up led to a 7.8% tightening of the A grade segment, down from 16.7% in January 2011, to 8.9% in January 2012.”
“The other classes all experienced negative demand, with C grade vacancy rates now at a staggering 21.5%, up from 10.3% at the same time last year. A and D grade are the only segments experiencing vacancy rates of less than 10%,” she continued.
In 2012, the market will add another 7,530 sqm of space and from 2013, no further projects are in the pipeline, however 9,911 sqm is mooted.
“The record net absorption levels in 2011 indicate that the Sunshine Coast market is rapidly filling new quality space.
“Major projects scheduled for the Sunshine Coast, such as the airport expansion, Kawana Health Precinct, Maroochydore CBD, Caloundra South and Palmview, could drive demand levels over the coming years,” MacDermott concluded.
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