This article is from the Australian Property Journal archive
VACANCIES are down across the Gold Coast’s office market, outperforming major capitals in January.
According to Colliers, office vacancies in the Gold Coast have fallen to 10.1% over the month of January, coming in ahead of the Brisbane CBD’s 15.4%, Adelaide’s 14.5% and Melbourne 11.9%.
All five of the Gold Coast’s major office precincts recorded a fall for the month, with the Queensland city’s office vacancy rate now down 4.2% over the last year, reaching its lowest rate since before the GFC.
The low rates across the city have been underpinned by major leasing deals across the market, with a positive net absorption of 17,216sqm in space over the year.
“Office vacancies on the Gold Coast are down from 11.3% six months ago and 14.3% this time last year, and we’re seeing solid demand continuing into the new year,” said Bede Blatchford, associate director office leasing at Colliers International.
At only 6.4%, Bundall currently reports the lowest rate of any office precinct in the Gold Coast, while Robina-Varsity Lakes saw the greatest improvement, falling from 18.8% in January 2021 to 10.9% this month.
The latter’s improvement was driven in large part by leasing activity at Centuria Office REIT’s 35 Robina Town Centre Drive, with over 6,000sqm of space leased by Colliers in 2021.
The resilience and recovery of small to medium enterprises in the face of another COVID-stricken year has driven much of the market’s strength, with SME’s accounting for around 70% of the city’s occupiers, many of whom expanded their footprint throughout the year.
“We have also seen businesses decentralise from CBD markets to take up space in regional areas such as the Gold Coast. The appeal for them is the lower density of population compared to CBD locations, reduced commute times for employees and less reliance on public transport, which are all factors that drive employee wellbeing and satisfaction,” said Blatchford.
At the same time face rents have been on the up in some of the Gold Coast’s office precincts, thanks to improved conditions for the office market. At the same time incentives have stabilised since the onset of the global pandemic.
“After a strong 2021, we anticipate the Gold Coast office market to maintain its momentum throughout this year with a possible further tightening of the city’s overall office vacancy due to the modest construction pipeline,” said Blatchford.
In the five key office precinct there are currently only two projects under construction, which will see a combined 4,274sqm of space added to the market over 2022, doing little to threaten vacancy rates.
“We’re also going to see a continuation of the flight to quality theme from occupiers that will likely lead to more office buildings undergoing refurbishment programs as landlords take advantage of positive leasing conditions,” added Blatchford.
While outside of major precincts there is currently around 9,300sqm in supply currently under construction and set to be completed over 2022.
“Businesses these days place a great deal of emphasis on staff wellbeing and satisfaction, and with the tighter labour market more businesses have been looking for office space that provides a workspace that employees want to be a part of,” concluded Blatchford.
