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Record absorption rates for Gold Coast commercial offices

The Gold Coast is seeing some of the lowest commercial vacancy rates in three years, after recording some of the region’s highest commercial vacancy rates just six months ago.

The region is now recording a vacancy rate of just 11.3 per cent — a level not seen since January 2018.

The six months to July recording the second highest absorption of space out of all Australian non-CBD markets (behind Brisbane fringe) — the highest absorption rate since January 2007.

All markets enjoyed vacancy reductions thanks to the strong net absorption recorded — the greatest in Robina/Varsity Lakes at 7,027sqm, bringing vacancies down from 18.8 per cent six months ago to 12.5 per cent.

The lowest vacancy is in Bundall after also recording significant take up to 7.2 per cent, followed by Broadbeach at 9.6 per cent.

Southport is again the largest office market on the Gold Coast, just ahead of Robina/Varsity Lakes, and boasted 2,787sqm of absorption, the highest level in more than seven years bringing vacancy to 12.3 per cent.

Surfers Paradise recorded its first vacancy decline in five periods to 12.5 per cent, just ahead of the Gold Coast total.

“The last six months have been remarkable for the Gold Coast office market, the strong uptake of 12,413sqm of space has not been witnessed since 2006,” Ray White Commercial head of research Vanessa Rader said.

“The lockdowns associated with COVID-19 which continue to happen have surprisingly been a stimulus to this office market by way of changing working habits and corporate decentralisation, together with the strong population growth, driven by interstate migration, growing new business opportunities.

“All quality grades of office stock have seen downward pressure, showcasing the varied volume and types of tenants who have converged on the Gold Coast for new professional accommodation.”

Ray White Commercial Gold Coast head of office services Luke Boulden said a sense of confidence had returned to the market in the first half of 2021.

“There has been a strong take up of office accommodation across all asset classes, sizes and precincts, evidently with the B-Grade 150-250sqm market being the strongest driver of inquiry and successful transactions,” Mr Boulden said.

“Flight to quality has been a big driver for key building owners of recent years, and this is proving to pay off, delivering refurbished tenancies and buildings to the market at attractive rental rates.”

Mr Boulden said 12 Short Street, Southport, was a prime example with a the recent refurbishment of the foyer and common areas, as well as new lifts, and a new building access control system installed prior to leasing.

With enquiry coming from a variety of industries and localities, Mr Boulden said Ray White Commercial Gold Coast was seeing an increase in larger government, corporate and institutional clients with requirements across the broader Gold Coast region.

“Your general white collar professionals remain active, however, we are seeing an increase in movement from NDIS/support services seeking new accommodation, as well as new start up enterprises ranging anywhere from tech and medical research, to newly formed professional service practices being lawyers, accountants,” Mr Boulden said.

“Against previous trends also, we are starting to see a shift in preference of locality from the market, with several key anchors now exiting their suburb seeking comparable grade office suites in alternative office precincts.

“Ordinarily, you find companies were very loyal to the suburb they were based in.”

REPORT AND IMAGES

Contact: 

Vanessa Rader

Head of Research – Ray White Commercial

0432 652 115

vrader@raywhite.com

Luke Boulden

Head of office services – Ray White Commercial Gold Coast

0423 159 170

l.boulden@rwsp.net

Media contact: 

Cassandra Glover

Media Advisor – Ray White Group

0447 000 472

cglover@raywhite.com

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