Gold Coast property: What’s really happening to city’s commercial office space market

The Gold Coast’s office space crunch has persisted for five years, making it challenging for businesses to secure space. Read the key factor making it harder

Office space on the Gold Coast will remain in short supply for up to five years, with new buildings still years away from completion.

New data showed the tightness in the market eased slightly in the past six months, with vacancy rates increasing from 6.3 per cent to 6.4 per cent, with new space opening but it’s already been filled by eager new tenants.

The situation has left vacancy remaining at historic lows.

Industry figures warn the low vacancy levels will make it hard for new players to enter the market.

Bede Blatchford of Colliers

Bede Blatchford, Colliers Gold Coast director of office leasing and investment services warned the market was in for a long road until more space opened up.

“We believe low vacancy, low incentive office market will be the new normal for here on, and office rents will only increase over coming years amid a constrained supply pipeline,” he said.

“We certainly see the long-term vacancy trend being down. We’ve seen vacancy remain at similar levels over the past year as both landlords and tenants become familiar with the new parameters of Gold Coast’s office market, being a low vacancy, low incentive, high cost of relocation market.

“What the data doesn’t capture is the strong absorption rates occurring outside the business precincts in non-core locations, where we have seen high absorption levels across the new supply added in both lifestyle precincts and the M1 corridor.

“The strong uptake of office space across the Gold Coast market has resulted in limited office opportunities, becoming increasingly difficult for tenants to find the space they require.”

Tania Moore, Senior Director at CBRE.

According to the data:

* More than 9707 sqm of the 10,508 sqm of office space which was released to the market in 2023 has already been absorbed, almost entirely by businesses which expanded their tenancies.

*The most competitive area remains the “prime grade” space in newer buildings falling from 4.6 per cent in mid-2023 to 3.3 per cent at the beginning of this year.

Tania Moore of CBRE said there would be no immediate relief for the market.

“A high proportion of transactional activity has been driven by existing businesses shuffling between buildings rather than new larger occupiers entering the market which is softening the high net absorption levels achieved in 2021 and 2022,” she said.

“The majority of inquiry continues to be driven by sub 200 sqm occupiers with a focus on move-in ready suites within quality buildings while unfitted suites are being overlooked due to an escalation in office fit-out costs making the feasibility of these works challenging to support over a typical three to five-year lease term.

“Market conditions will prove challenging for larger scale new businesses looking to enter the Gold Coast due to limited options available over 500 sqm, and this is also impacting existing larger occupier relocations within the market.”

FIRST LOOK AT NEW OFFICE BUILDING

Artist impression of a proposed office building on Arundel's Brisbane Road and Serene Court. Picture: Supplied

A site next to one of the Gold Coast’s biggest shopping centres will be redeveloped to become its newest office buildings.

As the city struggles against historically low vacancy levels, developer Apparence Pty Ltd has lodged plans for a three-storey office complex on the corner of Arundel’s Serene Court and Brisbane Road, near Harbourtown.

A cafe and restaurant will be built on the ground floor of the building with office space ranging from 140sq m to 149sq m. It is expected to have four tenancies on each floor, for a total of eight.

Exterior shots of the buildings at 174 Brisbane Road/2-4 Serene Court Arundel. It's going to be redeveloped into a big office building. Picture: Glenn Campbell

The site is currently occupied by two properties – a residential house and a vet, both of which would be demolished to make way for the office complex.

It is the latest in a series of similar projects.

At least three new towers with large amounts of office space have been proposed in the past two years but none are yet to be built.

A Melbourne consortium announced plans to build a 60-storey office supertower in 2022 as part of a Southport development which will include Australia’s tallest residential tower.

The tower, which is yet to be approved by council, is expected to have more than 12,000sq m of office space.

Another office tower proposed for Southport’s Ferry Road has failed to eventuate, as has one planned for the former Town and Country site in Nerang.

REVEALED: SURPRISE LOCATION OF NEW HOSTEL

Former office space in central Surfers Paradise will be turned into a micro capsule hotel under new plans being floated.

A building neighbouring Waxy’s Irish Pub and Condom Kingdom on Surfers Paradise Boulevard, will become the 15-capsule backpackers hostel, with developer AUSAPT Pty Ltd has lodged plans with the Gold Coast City Council this week.

The ground level of the 172sq m building, formerly a shop, will become its reception area and lobby, while the hotel will be created on the first floor.

Each capsule will have a bunk bed, for a total of 30 beds.

It will have a staff of four.

It is the latest in a wave of similar projects getting the green light or recently opened across the city.

A capsule hotel now operates out of Southport’s Nerang Street while the Planning and Environment Court last week overturned a council decision to approve a 270-bedroom backpackers hostel on the lower floors of the Surfers Plaza Resort.

The content summaries were created with the assistance of AI technology then edited and approved for publication by an editor.

Originally published as Gold Coast property: What’s really happening to city’s commercial office space market